The H-1B Series: Finale

A. Introduction - The H-1B "Specialty Occupation" Program - Good for Employers, Good for the U.S.

The H-1B nonimmigrant category allows qualified foreign workers to engage in temporary professional employment in the United States, sponsored by a U.S. employer. By using the H-1B program, U.S. employers can recruit and hire foreign workers with appropriate professional credentials to perform services in a "specialty occupation." H-1B classification can be obtained for an initial period of three years, and is renewable usually up to a total of six years, and beyond six years where certain steps have been taken towards acquiring permanent residence for the applicant in question.

The H-1B program is useful to U.S. employers of all forms and sizes. It is most known for helping high-technology employers deal with the acute shortage of skilled workers in the domestic labor market. However, it is also widely used by employers in other fields to hire professionals with particular qualifications or skills. The program provides access to an expanded pool of professional workers from which to recruit, including professionals located outside the U.S., located in the U.S. in a temporary status, or graduating from U.S. universities.

The H-1B program provides significant flexibility in meeting requirements that (1) the position offered be professional and (2) the foreign national beneficiary have certain qualifications. There is no strict list of specific occupations or required qualifications, for example, such as NAFTA contains for the TN category. Thus, although the H-1B program is most commonly associated with technical fields, employers can use the category for a broad variety of nontechnical positions, and foreign nationals may meet the relevant criteria through a variety of academic or nonacademic backgrounds.

The H-1B program also provides economic benefits to U.S. employers and to the U.S. economy. Because the program provides worldwide recruitment of skilled personnel, it helps U.S. employers maintain growth despite today's worker shortages. It also helps companies compete effectively in global markets by assisting them in attracting the best and brightest people in the world. A U.S. business that wants to be a world-class leader in its economic sector must be able to hire world-class talent. If it cannot, individuals with such talent will work for, or themselves start, competing businesses in other countries.

For these reasons, businesses, institutions, government agencies, and nonprofit organizations of all sizes regularly use the H-1B program as part of their overall human resources strategy. Some employers actively recruit H-1B workers in foreign countries, whereas others simply use the H?1B program to hire foreign nationals identified through traditional recruitment channels. Many employers recruit internationally merely by posting job openings on the Internet and are then approached directly from the foreign countries.

Before setting out to recruit or hire an H-1B foreign worker, however, employers should be aware of the legal requirements and procedural challenges involved in the program. Without adequate planning and attention to detail, the H-1B process can be difficult and frustrating. The substantive requirements to obtain H-1B classification for a foreign national and to secure the foreign national's actual status in the U.S. can present traps for the unwary. The actual petition process requires completion of a variety of forms and submission of several categories of supporting documentation, and delay will result if they are not in order. INS processing times for the petition are unpredictable and can be quite long, preventing the employer from making concrete plans for the foreign worker's arrival, unless the employer pays an extra $1000 fee to INS for "premium processing" within a set time frame. A number of record-keeping obligations as well as substantive legal obligations are imposed on the employer, many of which are on on-going during the time that the foreign worker is employed. At certain times of the year the program may not even be available due to exhaustion of the annual quota for new H-1B workers.

B. General Requirements Of H-1B Program

The H-1B program requires that a specific job offer in the United States be made by a U.S. employer, and that the sponsoring employer file an petition with the INS for authorization to employ the foreign worker. This article contains a summary of the basic substantive requirements and procedural steps involved in preparing the H-1B "specialty occupation" petition and actually hiring the H-1B worker. This summary may serve as a general checklist prior to offering a job to a foreign professional for whom H-1B work authorization is necessary. The requirements will be discussed in more detail in subsequent articles.

1. Status of Petitioner

The Petitioner must be a "United States Employer" or its agent. The U.S. employer is a "person, firm, corporation, contractor, or other association, or organization" in the U.S. which (1) engages a person to work in the U.S., as specified in the petition process, (2) has or will have an employer-employee relationship with the person or persons for whom it files H-1B petitions, as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the employee's work, and (3) has a U.S. Internal Revenue Service tax identification number. A foreign entity may file a petition to employ an H-1B worker in the U.S., but only if it first establishes at least a U.S. "branch office" and obtains the requisite tax identification number.

2. Specialty Occupation Defined

The petitioner must make a bona fide job offer in a "specialty occupation" position. A specialty occupation is an occupation that "requires theoretical and practical application of a body of highly specialized knowledge in fields of human endeavor," and which ordinarily "requires the attainment of a bachelor's degree or higher in the specific specialty, or its equivalent, as a minimum for entry into the occupation in the United States." The job offer must be a real, nonspeculative offer of employment based on the employer's actual need for the foreign national's services in the specialty occupation.

3. Foreign Worker's Qualifications

The foreign national who is the subject of the H-1B petition must be "qualified to perform services in the specialty occupation because he or she has attained a baccalaureate or higher degree or its equivalent in the specialty occupation." To meet this criterion, the foreign national may

hold a baccalaureate or higher degree "required by the specialty occupation" from an accredited U.S. college or university,

hold a foreign degree determined to be the academic equivalent of such a U.S. degree,

hold an unrestricted state license, registration, or certification to practice the specialty occupation in the state of intended employment, or

"have education, specialized training, and/or progressively responsible experience that is equivalent to completion of a U.S. baccalaureate or higher degree in the specialty occupation," "recognition of expertise in the specialty through progressively responsible positions directly related to the specialty."

The latter provision permits H-1B status to be approved for a foreign national who has not earned a baccalaureate degree when his or her experience combined with any education is equivalent to the statutory qualification for the occupation.

4. Labor Condition Application as Prerequisite

No H-1B petition can be granted unless the U.S. Department of Labor ("DOL") first certifies that the employer has properly filed a "Labor Condition Application" ("LCA") with the DOL. The LCA contains a set of attestations relating to conditions of employment in the offered position. This process imposes a set of further specific substantive and record-keeping requirements on the petitioning employer which have as their main purpose to guarantee that employment of H-1B workers will not adversely affect U.S. workers in the same occupation. These requirements are as follows:

The employer must pay at least the greater of (1) the "actual wage level" paid by the employer to other individuals with similar experience and qualifications for the employment or (2) the "prevailing wage level" for the occupational classification in the area of employment, and must offer benefits or eligibility for benefits (such as insurance, retirement and savings plans, bonuses and noncash compensation such as stock options) on the same basis and in accordance with the same criteria as the employer offers to U.S. workers. It is a violation of this requirement for the employer to place an H-1B worker in "non-productive status" (commonly known as "benching") without paying the specified wage.

The employer must certify that "employment of H-1B nonimmigrants will not adversely affect the working conditions of workers similarly employed in the area of intended employment." This is also referred to as the "prevailing working conditions" statement, and means that working conditions for similarly employed U.S. workers should remain similar to conditions that preceded employment of the H-1B foreign national. "Working conditions" encompass such matters as benefits, vacation periods, hours, and shifts.

The employer must certify that there is "not a strike or lockout in the course of a labor dispute in the occupational classification at the place of employment."

The employer must provide notice to employees of the filing of the LCA through (1) notification to a bargaining representative in the occupational classification or, (2) if there is no bargaining representative, use of other methods such as physical posting in conspicuous locations at the place of employment or "electronic notification" to employees in the occupational classification.

The employer must keep certain records pertaining to the LCA available for examination upon request by the public or by the DOL. These records include:

a copy of the LCA,

documentation of the wage rate paid to the H-1B worker,

documentation of the system used to set the "actual wage" the employer has paid or will pay to workers in the occupation such as a memorandum summarizing the system or a copy of the employer's pay system or scale,

documentation used to establish the "prevailing wage" rate for the occupation, and

documentation that the requirement of notice to employees, by means of a bargaining representative or posting, has been met.

These records must be retained throughout the period of the LCA and for one year thereafter.

If the employer is an "H-1B Dependent Employer" or a "Willful Violator," then it must make additional attestations, subject to certain exemptions. An "H-1B Dependent Employer" is one with a particular proportion of H-lB nonimmigrants in the total "full time equivalent" workforce, as follows:

an employer having twenty-five or fewer full-time equivalent employees with more than seven H-1B nonimmigrant employees,

an employer having at least twenty-six but not more than fifty full-time equivalent employees with more than twelve H1B nonimmigrant employees, or

an employer having at least fifty-one full-time equivalent employees, of whom at least 15% of the number of such fulltime equivalent employees are H-1B employees.

A "Willful Violator" is an employer against whom the Department of Labor or Department of Justice had entered a finding of violation in proceedings related to a prior Labor Condition Application, on or after October 21, 1998, and found that the employer committed a "willful failure" or a misrepresentation of a material fact, during the five-year period preceding the filing of the new LCA. The special additional attestations these employer must make are:

The employer will not displace (i.e., lay off) any "similarly employed" U.S. worker within ninety days before and ninety days after the date of filing an H-1B petition supported by the LCA. A "similarly employed" worker is one who is employed in an "essentially equivalent" job in the same geographic area of employment.

The employer will not place an H-1B nonimmigrant employed under the LCA with any other employer or at any other employer's worksite unless it inquires of the other employer whether that employer has displaced or intends to displace a similarly employed U.S. worker within ninety days before or after the placement, and the other employer replies in the negative, and

Prior to filing any petition for an H-1B nonimmigrant supported by the LCA, the employer took or will take good faith steps, using industry-wide standards, to recruit U.S. workers for the job, and the employer has affirmatively offered the job to any U.S. worker who has applied and who is equally or better qualified than the H-1B worker.

These additional obligations do not apply, however, to an LCA filed for the employment of "exempt" H-1B nonimmigrants, who are H-1B workers receiving wages at an annual rate of at least $60,000, or who have attained a master's or higher degree (or its equivalent) in a specialty related to the intended employment.

5. Filing the H-1B Petition

The petition is filed with one of four Immigration Naturalization Service ("INS") regional service centers in Vermont, Nebraska, Texas, or California. It must usually be filed with the service center with jurisdiction over the intended location of employment. The petition package must include INS Form 1-129 and its H Supplement, the INS Form 1-129W the certified LCA, various categories of supporting documentation to establish the substantive requirements outlined above, and certain documents relating to the foreign national's status if he or she is already located in the U.S.

6. Receipt of H-1B Status

The petition approval is not a visa, nor does it automatically grant authorization for a foreign national to begin work. If the foreign national is outside the U.S., then he or she must be inspected and admitted to the U.S. in H-1B status, which for all but Canadians requires an H-1B visa to be issued from a U.S. consulate abroad. If the foreign national is already in the U.S. in a different nonimmigrant status or in H-1B status with another employer, then he or she must be specifically granted a change to H-1B status or an extension or amendment of any existing H-1B status in order to hold the employment. Under the concept of "H-1B portability," though, if the foreign national is in the U.S. and holds or has previously held H-1B status and meets certain other conditions, then he or she may begin working for the new employer upon the filing of a new H petition, pending its outcome.

C. H-1B Statutes and Regulations Practitioners Should Know

The following sections will discuss the legal background of the H-1B "Specialty Occupation" Program.

1. Relevant Acts of Congress and Statutory Provisions

The Immigration and Nationality Act of 1952 (the "Immigration and Nationality Act" or "INA") first established an H-1 nonimmigrant visa classification for temporary workers "of distinguished merit and ability." The relevant provisions of the INA have since been amended several times, leading to the H-1B program as we know it today, most significantly by the Immigration Act of 1990 ("IMMACT 90"), with further modification by the Miscellaneous and Technical Immigration and Naturalization Amendments Act of 1991, the American Competitiveness and Workforce Improvement Act of 1998 ("ACWIA"), and The American Competitiveness in the Twenty-First Century Act ("AC 21").

In its current form the H-1B program was defined chiefly by the Immigration Act of 1990. Most significantly, IMMACT 90 replaced the "distinguished merit and ability" standard with today's concept of "specialty occupation" professionals, and it added the requirement that prospective employers of H-1B foreign nationals file a "labor condition application" with the U.S. Department of Labor, making certain attestations intended to protect the wages and working conditions of U.S. workers. It also created for the first time an annual numerical limit on issuance of new H-1B visas or grants of H-1B status of 65,000, and it imposed a maximum length of stay in the U.S. for H-1B nonimmigrants of six years.

ACWIA was enacted in 1998 in response to sharp increases in usage of the H-1B program and evidence of a growing shortage in the U.S. of skilled workers. It authorized a temporary increase in the annual numerical limitation on H-1B nonimmigrants to 115,000 for federal fiscal years 1999 and 2000 and to 107,500 for 2001. The limit was to revert to 65,000 for fiscal year 2002. The federal fiscal year runs from October 1 of the prior calendar year through September 30. Between 1998 and 2000, however, demand for the H-1B program continued to skyrocket on the strength of the U.S. economy. In response to calls for further increase in the authorized total of H-1B workers, Congress enacted AC 21 in October 2000. AC 21 raised the annual cap to 195,000 for fiscal years 2001, 2002, and 2003, and exempted certain categories of H-1B petitions from being counted against the cap. The increase is only temporary, with reversion to a 65,000 limit to occur in fiscal year 2004.

Legislative debate over both ACWIA and AC 21 was contentious, with critics arguing that the H-1B program hurts U.S. workers in specialty occupation areas by allowing foreign professionals willing to work for lower pay to compete for their jobs and that the labor condition application protections are ineffective to prevent this. As a trade-off, the two bills included new provisions designed to increase protections for U.S. workers and create opportunities for training and education to improve the U.S. workforce. One concept, introduced by ACWIA and extended by AC 21, defines a class of so-called "H-1B dependent employers" and placed additional labor condition application obligations and other restrictions on their use of the H-1B program. In addition, a special "education and training" fee was added to the filing fee for H-1B petitions, of $500 under ACWIA, then raised to $1,000 under AC 21, with the money to be used for scholarships in math and science and grants for education and training in technical areas. The total filing fee for H-1B petitions in most cases is now $1,130. Certain types of petitioners are exempt from the fee, however, and only need to pay the $130 base processing fee. Still other provisions significantly increased penalties for employers found to have made a "willful failure or misrepresentation" with respect to labor condition application obligations.

The fee increase and "H-1B dependent" rules are intended to be temporary, for a period commensurate with the increases in annual limit above 65,000. Barring further
Congressional action, these provisions will "sunset" on October 1, 2003, when the limit reverts to 65,000.

AC 21 made two other important changes that are very helpful to H-1B employers. First, it introduced the concept of "H-1B portability," to allow employers petitioning for foreign nationals already in the U.S. in H-1B status with another employer to have the beneficiary begin work immediately upon the filing of the petition with INS. Formerly, the beneficiary was not allowed to begin work for the new petitioning employer until the petition was approved, which could take several months. Second, AC 21 created an exemption from the normal six-year limit on total stay in H-1B status for H-1B nonimmigrants who are the beneficiaries of a permanent residence process which has reached certain stages in the approval process.

Following are general citations to the current statutory provisions governing the H-1B program, which all practitioners should know:

Under the statutory scheme, two separate U.S. administrative agencies have responsibility for the H-1B program, the INS and the Department of Labor ("DOL"). The INS authorizes actual H-1B classification for a particular foreign national beneficiary, based on a petition submitted by the employer describing the job to be performed and the person's qualifications. The DOL reviews and certifies the employer's labor condition application, a prerequisite to the INS petition, and retains jurisdiction to enforce the employer's obligations regarding wages and working conditions. Each of these agencies has promulgated detailed regulations related to its respective function, providing further legal criteria and procedural instructions.

The most significant recent regulatory development came in December 2000, with DOL publication of a long-anticipated Interim Final Rule to implement the "H-1B dependent employer" and other provisions of ACWIA that required final DOL regulations to become effective. The rule-making also republished and finalized certain prior DOL regulatory proposals relating to the H-1B program which had never been finalized, including several provisions which had been invalidated by a 1996 federal Court decision in a lawsuit filed by the National Association of Manufacturers, and added other entirely new concepts.

There were several major changes that employers must heed in these regulations, which became effective January 19, 2001. Some of the changes have general applicability to all H-1B petitioners, whereas others are applicable to "H-1B dependent" and "willful violator" employers. The most significant of the generally applicable provisions define when the employer must file a new LCA to cover an employee who is traveling to a new location. The rules define when the location is a considered a new "place of employment" for purposes of the LCA requirement, and if so, when the employer must submit a new LCA. The rules also changed the LCA form and filing procedures so that employers cannot list more than two locations on the LCA. Formerly, employers could list any number of locations, utilizing an addendum to the form.

A related change requires posting of the LCA notice, or the alternative form of electronic notice, to affected employees, to be provided at any new "place of employment" where the H- 1B nonimmigrant is assigned, including third-party client work sites. These two changes make the LCA process much more burdensome and complex for employers of "roving" H-1B workers such as IT consultants, who frequently move from one client location to another.

The other major changes affect the "H-1B dependent" and "willful violator" employers. As described above, the "H-1B dependent employer" concept impacts employers who have certain proportions of H-1B nonimmigrants in their workforces. Under the ACWIA scheme, "H-1B dependent" employers are (1) companies with twenty-five or fewer full-time equivalent employees who employ seven or more H-1B workers, (2) companies with twenty-six to fifty full-time equivalent employees who employ twelve or more H-1B workers, and (3) companies with fifty-one or more full-time equivalent employees who employ H-1B workers as 15% or more of their workforce. These employers are then required to make additional attestations on an LCA related to "non-displacement" of U.S. workers in "essentially equivalent" jobs in the specific area of employment and related to recruitment of U.S. workers for the job(s). An "aggrieved" U.S. worker who has submitted a resume or otherwise applied for the job that was offered to the H-1B nonimmigrant may file a Complaint with DOL, in response to which the DOL will conduct an investigation.

These provisions represent a major change in the H-1B program because, for the first time, an employer can be required to affirmatively show that it has attempted to recruit U.S. workers prior to filing an H-1B petition-a requirement analogous to the labor certification process for sponsoring foreign nationals for permanent residence. This goes beyond the original focus of the LCA, dating to IMMACT 90, that required the employer simply to offer equal pay and working conditions between U.S. and H-1B workers, but which did not regulate actual recruitment or hiring. Further, the employer runs the risk of being prevented from using the H-1B program at all or facing intense DOL scrutiny if it must subsequently lay off workers.

Two other recent regulatory changes have had significant impact on H-1B petition practice of a more helpful nature. In June 2001, INS published a regulation implementing a "premium processing" program whereby a petitioner may pay an extra $1,000 "premium process" fee and receive a guaranteed response to an H-1B petition filing within 15 days, beginning July 30, 2001. Such a concept had been authorized in budget legislation passed by Congress in December 2000. In December 2001, DOL published a rule amending the Labor Condition Application regulations to provide for electronic filing and processing of LCAs utilizing a web based system of forms and instructions. Under this system, DOL has for the first time consistently been able to meet an obligation to process LCAs within seven days.

Following are general citations to the current INS and DOL Code of Federal Regulations provisions governing the H-1B program:

For a few years in the not too distant past, one of the hottest immigration topics in the media and in the business community was the annual numerical limit on usage of the H-1B category, dubbed the "H-1B cap." As the U.S. economy grew rapidly during 1998-2000, employers increasingly turned to the H-1B program to fill short-term needs for qualified professional staff. This growth in demand caused the program to reach the applicable annual quota at various points before the end of the fiscal year in 2000 and each of the preceding three years, leading to widely publicized difficulties for employers who were forced to leave professional positions unfilled until the next yearly H-1B cycle.

As amended by AC 21, the statutory provision establishing the H-1B limit provides that the "total number of foreign nationals who may be issued visas or otherwise provided nonimmigrant status during any fiscal year" under the H-1B program may not exceed 195,000 for fiscal years 2001, 2002, and 2003, and 65,000 for each succeeding year. The limit was 65,000 for all fiscal years prior to 1999, and was increased to 115,000 for 1999 and 2000, by ACWIA. The limit applies only to new issuance of H-1B visas or grants of H-1B status, meaning it applies to H-1B petitions for beneficiaries out of the country seeking a visa at a U.S. consulate, or in the U.S. in another status and needing change of status to H-1B who have not held H-1B status in the U.S. within the prior year. It does not apply to renewal or amended petitions for beneficiaries already in the U.S. in valid H-1B status, seeking to transfer H-1B authorization to a new employer or to change or extend H-1B status with their existing employer, or to anyone who has held H-1B status in the U.S. within one year prior to the filing of the petition. Spouses and children of principal H-1B foreign nationals, who are accorded H-4 status to accompany the principal, are not counted in the numerical limit. The federal fiscal year runs from October 1 through September 30.

Warning signs that the H-1B program was reaching its capacity under the original IMMACT 1990 limit of 65,000 first surfaced in 1996. In that year the INS halted processing of new H-1B petitions for a time as of August 20, near the end of the fiscal year, on the basis of a preliminary count indicating that it had reached the cap. A more accurate count showed that it had not, and processing resumed as of September 6, 1996 and continued on to the end of the fiscal year on September 30.

The next year INS did indeed reach the cap for the year on new petition approvals, as of approximately August 15, 1997. Rather than halting processing, however, the INS dealt with the problem by continuing to process petitions but assigning approval dates of no earlier than October 1, 1997, so as to defer counting the approvals to the fiscal year 1998 limitation. Because the cap was reached with only six weeks to go until the start of the next fiscal year and the availability of the new year's quota, the effect of this advance approval was not considered overly disruptive.

Real problems with the cap began in 1998 when growth in the H1B program accelerated sharply. In that year INS announced on May 11 that it had reached the annual 65,000 cap in petition approvals and would stop processing new petitions and reject further filings for the year unless a petitioner requested a start date of October 1, 1998 or later so that the petition would be counted against the fiscal year 1999 quota. Petitions filed through mid-April of the year generally were processed, with procedural differences among the various INS service centers. Other petitions filed before the May 11 announcement remained suspended as "pipeline" cases. Ultimately the INS gave petitioners an option to change the requested start date on the "pipeline" cases to October 1, 1998, and then processed them under the 1999 count.

Thus, employers in 1998 were forced to wait with no new H-1B approvals available for approximately half the year. This generated pressure on Congress to pass legislation to raise the annual limit. Over the summer and fall of 1998 Congress considered several bills in a context of controversial public debate over the H-1B program. High technology employers in particular complained of a dire shortage of qualified professional workers, and relayed to Congress how the H-1B program helps them and the overall U.S. economy grow. Labor advocates described the alleged worker shortage as inflated and argued that the H-1B program unfairly keeps professional wages down and hurts U.S. workers. Ultimately, Congress passed the ACWIA legislation with its temporary increases in the annual limit and its new restrictions on the program as a compromise.

To widespread surprise, the near doubling of the limit for fiscal year 1999 turned out to be wholly inadequate to meet the continued growth in petition filings, a problem that was exacerbated by the fact that even before the start of the 1999 fiscal year on October l, 1998, INS had already approved approximately 19,500 petitions chargeable to the year's quota that had been filed during May through September 1998. Thus, by April 1999, petition processing slowed considerably at the service centers as the INS became concerned it was close to the total and attempted to monitor the count carefully. Finally, on June 15, 1999, at a point when the service centers were processing cases filed in early April, the INS published a notice announcing that based on the number of petitions approved for the year and the number on file and pending, the statutory cap had effectively been reached for fiscal 1999, and further filings would be rejected except those requesting an October 1, 1999 or later start date. The INS service centers continued to process pending cases in the "pipeline" slowly, under tight scrutiny from headquarters to equalize the rate of processing at each of the four centers so that no advantage could be gained in obtaining approval because any petition was filed at a particular service center. The INS finally completed processing of the number of cases it believed would fill the quota in August 1999. It ultimately processed petitions filed through April 22, 1999, a cut-off date almost exactly the same as in the prior fiscal year.

The INS did take steps in its 1999 announcement to address one of the more problematic consequences of the cap: students and exchange visitors in the U.S. who are completing their programs and then must change status to H-1B, but whose initial status expires because of the unavailability of H-1B approval. In many cases these persons already work for the petitioning employer under a "practical training" component of their programs that expires in the spring or summer. When the practical training employment authorization runs out these individuals may no longer work until a change of status to H-1B is approved, which would be delayed until October. Of greater concern is whether such persons would have to leave the U.S. after expiration of the applicable grace period in their status (sixty days for F-1 students and thirty days for J-1 exchange visitors) and wait abroad for approval of the H-1B petitions on their behalf, rather than remain in the U.S. In recognition of this problem the INS published a rule allowing such persons to remain in the U.S. to wait for the October 1 H-1B start date even if status would expire prior to that date, provided the individuals do not work without authorization during the waiting period. In the June 15, 1999 Notice and in an Interim Rule published simultaneously the INS formally announced that persons changing from student or exchange visitor status facing this "gap" would be automatically granted extension of F-1 or J-1 status to allow them to remain in the U.S. pending a decision on their change of status petitions or pending an October 1 H-1B start date.

For fiscal year 2000, beginning October 1, 1999, processing of H1B petitions proceeded quickly until December 1999, when the INS began imposing periodic "pauses" to obtain an accurate count and keep all four service centers processing cap petitions at the same rate. After that date processing progressed slowly through the beginning of 2000, and employers hurried to file as many cases as possible while the INS would still accept them. On March 21, 2000, at a time when it was processing cases filed in late January 2000, the INS made an announcement projecting that sufficient petitions had been filed to reach the cap and therefore that no further petitions seeking start dates before the beginning of fiscal year 2001 on October 1, 2000 would be accepted. Like the previous year's notice, this was based on the number of petitions approved for the year combined with the number on file awaiting decision, so actual processing of pending cases towards the year's quota continued, albeit quite slowly. Finally, on July 20, 2000, the INS issued a statement that it had officially reached a total of 115,000 approvals as of that date. (It actually processed petitions filed through March 17, 2000.) In August 2000, the INS began processing petitions requesting effective dates of October 1, 2000, the start of the new fiscal year.

Thus, for the third year in a row, the availability of new H-1B petition approvals "ran out" for approximately half the year, and prior to the cutoff employers had to plan their H-1B needs for the year far in advance, and then deal with the expense and hassle of a mad scramble to get as many petitions as possible filed before the cutoff, hoping to "beat" all the other employers doing the same thing.

One interesting dispute arose over a report the INS submitted to Congress in September 1999 that estimated it had actually approved between 4,500 and 20,000 petitions too many for fiscal year 1999, due to inaccuracies in its counting methodology. It eventually hired an auditing firm to review its methodology and help determine the amount of any discrepancy. Based on that firm's report, issued in April 2000, INS concluded that it approved 21,888 H-1B petitions in excess of the fiscal year 1999 cap. The question then was what, if anything, the INS or Congress would do about the overage. This problem was resolved by the AC 21 legislation which, in addition to its prospective raising of the H-1B cap, implemented a retroactive increase for 1999 to cover all petitions approved by the INS.

AC 21 also retroactively allocated petitions filed after the March 21, 2000 cutoff, but before September 1, 2000, to be counted in fiscal year 2000, and raised that year's quota accordingly. The fiscal year 2001 count therefore began from a clean slate with petitions filed only after September 1, 2000, intended for approval on or after October 1.

AC 21 further exempted certain new petitions from being counted in the cap at all. These include petitions filed

by an institution of higher education or a related or affiliated nonprofit entity,

by a nonprofit research organization,

by a governmental research organization, or

for certain physicians formerly holding "J-1" status in the U.S. who have received state sponsorship to waive the requirement that they return to their home country in exchange for participating in a program to practice in a medically underserved area in the U.S.

This freed up an additional number of petitions from the cap, estimated to be approximately 6,000 to 10,000 in a typical year.

As it turned out, the 195,000 cap for Fiscal Year 2001 was sufficient to fully cover demand for new H-1B approvals. In November 2001, after the September 30, 2001 end to the fiscal year, INS reported that it had approved 163,200 H-1B petitions against the 195,000 cap for the year. And, for the 2002 fiscal year, running to September 30, it appears new H-1B filings have declined and INS is again on track to finish the year within the 195,000 limit. In the most recent release of figures, INS reported that during the first quarter of the current fiscal year, from October 1, 2001, to December 31, 2001, approximately 28,000 H-1B petitions were approved against the 195,000 limit, and an estimated 18,000 petitions that may count against the cap were pending.

Assuming H-1B filings do not significantly increase, it is likely that for FY 2003, beginning this October 1, the 195,000 limit will again be sufficient to meet demand throughout the year. However, for FY 2004, beginning October 1, 2003, the limit reverts to 65,000, just one third the current number. Already, the debate over whether Congress should extend the higher limit is shaping up to be highly contentious, and immigration advocates are uncertain at best over the prospects of passing favorable legislation. Labor groups and others are arguing that with the weakened US economy, particularly in IT and other technology sectors, the H-1B program hurts laid-off U.S. workers and therefore Congress should let it revert to pre-1998 levels. Employers and other advocates of business immigration will need to organize and make their case well to counter these arguments. At a recent Washington D.C. meeting of AILA (American Immigration Lawyers Association) advocacy personnel from around the country, a legislative counsel from the staff of Sen. Edward Kennedy (D-Mass.), who is Chair of the Senate Immigration Committee, said that the H-1B debate next year "will be a difficult issue."

What will happen? My prediction is that Congress will take no action, if any, unless and until the 65,000 cap is exhausted early in the fiscal year and then employers raise an outcry over being cut off from the program for several months, analogous to the "crisis" level of the situations in 1998 and 2000 which resulted in ACWIA and AC 21.

Employers looking ahead will thus have to engage in strategic planning for filing of H-1B petitions early in the 2004 fiscal year. One benefit for H-1B filers of this Congressional inaction, though, will be the petition filing fee reverting to $130, as authority for the $1,000 education and training component of the fee expires along with the additional cap numbers.

E. The Petitioner And Its Job Offer

The basic premise of the H-1B category is that there is (1) a "United States Employer" (2) making a bona fide, nonspeculative job offer (3) for temporary employment (4) in a qualifying occupation (5) to a qualified foreign professional.

1. The "United States Employer"
A "United States Employer" means
"a person, firm, corporation, contractor, or other association, or organization in the United States which:

"(1) Engages a person to work within the United States;
"(2) [Will have] an employer-employee relationship [with the H-1B employee] as indicated by the fact that it may hire, pay, fire, supervise, or otherwise control the work of any such employee;
"(3) And has an Internal Revenue Service tax identification number."

This definition offers wide latitude regarding the form of business organization that may file an H-1B petition. In a majority of cases the petitioner is a U.S. based business corporation. However, it may also be any other form of firm or association, a nonprofit organization or government agency, a partnership, or even a sole proprietorship or individual person. The common requirement is simply that the entity have a U.S. Internal Revenue Service ("IRS") tax identification number. Business organizations of all forms obtain such numbers from the IRS to prepare business tax returns. Sole proprietorships or individuals may use personal Social Security numbers if they do not qualify for a business tax identification number.

A foreign business entity may, similarly, wish to file an H-1B petition and directly employ a person in the U.S. in H-1B status without going through the expense and trouble of incorporating a U.S. subsidiary corporation. Such employment is permissible under two scenarios. First, the foreign business may establish a simple "branch office" business presence in the U.S. and obtain an IRS tax identification number for the branch office. A tax or accounting professional can help with that process and provide advice as to the ramifications of then establishing a regular U.S. subsidiary corporation. Or the foreign business may authorize a U.S. "agent" to file the petition on its behalf. Among other considerations, a petition filed by a U.S. agent is subject to the condition that the agent "must guarantee the wages and other terms and conditions of employment" of the beneficiary.

The "employer-employee relationship" requirement raises questions in situations where the H-1B nonimmigrant owns a significant interest in the petitioning entity, or is one of its partners, proprietors, or founders. In today's economy, foreign professionals are often involved in founding start-up technology companies that then sponsor them for H-1B status in the U.S. In such circumstances it may appear that the employer/employee distinction between the petitioner and beneficiary is blurred. In the most extreme example, a foreign national may incorporate a company on his or her own, and be the sole founder, shareholder, officer, and employee. The putative H-1B petition could then be viewed as simply a vehicle for the foreign national to engage in self-employment.

In such cases care must be taken to examine the foreign national's role in the enterprise, and the petitioner must be prepared to explain how it retains the ability to "hire, pay, fire, supervise, or otherwise control" the work of the employee named in the petition. So long as that test can be met there is no prohibition on the foreign national beneficiary of an H-1B petition being an owner, founder, partner, or other major stakeholder. Where the foreign national is a co-founder and owner of a start-up company, for example, it is recommended that he or she hold less than a majority stock interest so that he or she is theoretically subject to the "control" of the corporate entity.

The "employer-employee relationship" requirement thus prohibits a foreign national from filing a petition as a sole proprietor on his or her own behalf, arranging for self-employment. Nevertheless, in a result that appears inconsistent with the regulatory requirement, the INS Administrative Appeals Office ("AAO") has overturned a service center's denial of an H-1B petition filed by an incorporated mathematical research firm whose sole owner and employee was the H-1B beneficiary. The decision was based on the petitioner's corporate status, holding that the "sole proprietor of a corporation" may be "employed by that corporation as the corporation has a separate legal entity from its owners." Therefore, the AAO held, a "bona fide employer-employee relationship did exist and the petitioner qualified as a U.S. employer." The decision was not designated as precedent, so it remains to be seen if the INS adopt this approach.

2. The Bona Fide, Nonspeculative Job Offer
The petitioner must be able to demonstrate that it is making a bona fide, nonspeculative job offer in the requested H-1B occupation. This derives from the general premise that "H-1B classification may be granted to an foreign national who . . . will perform services in a specialty occupation. . . ." The petitioner must establish to the satisfaction of the INS that if the petition is approved, the beneficiary "will" perform services in the specialty occupation position described. If despite its representations the petition only establishes, in the opinion of the INS, that at best the foreign national "may" perform such services, then it will be denied. This requirement, general in nature, tends to be a factor in several more specific concepts applied by INS in assessing the credibility and viability of the stated facts about the petitioner and the offered position and salary. The concepts do not represent express regulatory requirements in the H-1B program, but do borrow from principles that are express requirements in other immigration contexts.

First and fundamental, the employer must establish that it comprises a real, viable, fully operational business enterprise, capable of making a good-faith job offer and actually hiring the H-1B foreign national in the specialty occupation. For large companies this will not be a problem, but they must still remember to submit supporting documentation, which would generally include an annual report and a selection of promotional literature showing who or what the company is, what it does, when it was founded, and the level of annual income. Even large, well-established employers have had difficulty with the INS because they neglected to include basic supporting documentation.

For small companies or start-up enterprises, it is crucial to submit sufficient documentation to show, at a minimum, that the business has been legally established, has a business premises, and has begun full operations. This documentation would include articles of incorporation, an office lease, photographs of the office location, a detailed business/financial plan, tax returns, promotional literature or product documentation, an organizational chart, and any other evidence of business activity such as contracts or partnerships.

It is also important to demonstrate that the employer has the financial ability to pay the salary offered over the period designated on the petition, or the realistic promise of generating such resources. For large, well-established companies this is, again, something that will usually be easily proved through an annual report showing gross earnings and capitalization or a similar document. For small companies, noncorporate individual proprietorship or partnership employers, or start-up enterprises this needs careful attention. Supporting statements and documentation should be organized around two themes: (1) establishing the level of liquid resources and cash flow the petitioner has on hand at the time of filing the petition and (2) establishing the level of cash flow and income that is anticipated over the petition period. Either of these approaches may be the stronger argument. A start-up technology company in the product development phase, for example, may have a generous level of assets provided by venture capital financing, but no projected income for the foreseeable future. A start-up consulting company, however, may have limited current assets but also possess client contracts that guarantee an income stream once the company can place consultants at the client sites.

Supporting documentation to demonstrate current assets or level of resources and cash flow include financial statements, bank statements, a deed for any real property, payroll records showing the current level of payroll, tax returns, and term sheets or other documentation of angel or venture financing. Documentation of expected future income would include a business plan, projected financial statements, contracts to provide services or sell the company's products, or other evidence of the business' planned growth and revenue projections.

Note that an express "ability to pay" requirement is not part of the H-1B regulations the way it is a requirement in employment based permanent resident petitions. However, as a practical matter the Service Centers conflate "ability to pay" with the more general question of viability of the job offer, so it can be very important to present credible financial information as part of the supporting documentation. Further, it has become common in recent years that U.S. consulates overseas will strictly scrutinize the employer's financial viability and ability to pay the salary offered even if the INS had been satisfied and approved the petition. It can be a rude surprise for the beneficiary of an approved H-1B petition to be required to submit the employer's tax returns or other more extensive financial documentation at the consulate. It does happen that even after the INS has approved the H-1B petition, a consulate may refuse the H-1B visa on grounds that the employer has insufficient income or assets to show a bona fide ability to pay the wage stated in the petition.

Separate from the questions of whether the company is established and has sufficient resources to pay the worker is the question of whether it has "sufficient work" or a bona fide need for the beneficiary's services, in the specialty occupation. If it does not, the petition is viewed as offering only "speculative employment "and will be denied. The INS will raise this issue if the job is described in vague, nonspecific terms or where a company, particularly a small one, has simultaneously filed several substantially identical petitions without an explanation of the need for the overall group of H-1B workers.

This becomes a problem most often for small consulting companies who simultaneously file several H-1B petitions for workers in a foreign country. Typically, the company has not arranged client sites for the beneficiaries at the time of the petitions but plans to do so after they enter the U.S. and can meet clients face to face. This creates a Catch 22-the INS will not approve an H-1B petition if it does not appear there is sufficient work or a bona fide need for the person, but the employer cannot confirm that the person's services will be desired by a client until he or she is in the country.

It is in fact not ordinary INS policy to require the petitioner to submit specific contracts between the petitioner and proposed work site or to otherwise demonstrate that one particular client site has work for the beneficiary. However, the petitioner should be able to show from a totality of the circumstances that it has a bona fide need and ability to employ the person, and as such it will be able to place the person at a client site very soon after entry, or place the person on its own payroll without a client placement and use the person directly for in-house or similar projects. (Under all circumstances the employer will be required to place the beneficiary on its payroll within thirty days of his or her entering the country.) The employer should therefore include documentation of the nature and scope of its client base and open client project needs, and as much specific information as it can about the beneficiary's skills and how it envisions those skills meeting particular client needs or fitting into on-going projects. If the employer is in fact already contracted to place the foreign national at a client location, then the contract or a confirming letter from the client should be included with the petition. Obviously, large consulting companies with broad client bases are at a distinct advantage.

The "ability to pay" and "speculative employment" concepts have historically been a regular part of H-1B adjudication at the four service centers. A recent decision of the INS Office of Administrative Appeals, however, criticized these concepts and overturned a service center decision that used them as a basis to deny a consulting company's H-1B petition. "There is no support," the decision states, "for the exploration of this concept [of speculative employment] per se in either statutes or regulations." The "ability to pay" concept was held not to be under the province of the INS, but of the DOL. "Wage determinations and the enforcement of their payment with respect to the H-1B classification are the sole responsibility of the Department of Labor," the decision states. The decision has not been designated as a binding precedent. It remains to be seen what impact, if any, the decision will have, but it might presage relaxation of the standards.

Finally, in still another variation of INS concern over whether an H-1B beneficiary "will" be employed in a specialty occupation, the INS questions petitions where the petitioner is a small enterprise that would not usually need the services, full-time, of a person in the specialty occupation. The INS might suspect, instead, that the person will perform nonspecialized duties, or at best have a hybrid of specialized and nonspecialized duties, and that the petitioner is "inflating" the professional nature of the job description. An example would be a small retail business enterprise of five or fewer employees filing an H-1B petition for an accountant. The INS would question whether that size business needs a professionally trained accountant and, rather, suspect that the person will primarily perform nonprofessional bookkeeping duties. A low salary level would also support such a suspicion.

A. What Is An H-1B "Specialty Occupation"?

The Legal Standard

The fundamental requirement of the H-1B program is that the position offered be a "specialty occupation." Under the Immigration and Nationality Act, "specialty occupation" means

"an occupation that requires--

"(A) theoretical and practical application of a body of specialized knowledge, and

"(B) attainment of a bachelor's or higher degree in the specific specialty (or its equivalent) as a minimum for entry into the occupation in the United States."
INS regulations provide an expanded form of this definition:

"Specialty occupation means an occupation which requires theoretical and practical application of a body of highly specialized knowledge in fields of human endeavor including, but not limited to, architecture, engineering, mathematics, physical sciences, social sciences, medicine and health, education, business specialties; accounting, law, theology, and the arts, and which requires the attainment of a bachelor's degree or higher in a specific specialty, or its equivalent, as a minimum for entry into the occupation in the United States."

Translated into simpler terms, the "specialty occupation" requirement means that the job offered must be a professional-level position which would normally require attainment of a four-year college or university degree. Moreover, the degree requirement must be in an appropriate subject area. A position that could be filled by an individual with a bachelor's degree in any field would not ordinarily qualify as a specialty occupation.

Within those general parameters, there is no set list of specific positions considered to be specialty occupations comparable to the list of job categories that exists under NAFTA for TN professionals. Some positions will appear prima facie to be "specialty occupations" more than others, but overall employers enjoy a fair amount of flexibility in the variety of positions which can be defined as professional and be the subject of an H-1B petition.

In all cases the petitioning employer must submit evidence to the INS to establish that its position meets the "specialty occupation" standard. INS regulations add the following specific criteria:

A baccalaureate or more advanced degree or its equivalent is ordinarily the minimum requirement for entry into the particular position;

The degree requirement is common to the industry in parallel positions among similar organizations or, in the alternative, an employer may show that its particular position is so complex or unique that it can be performed only by an, individual with a degree;

The employer normally requires a degree or its equivalent for the position; or

The nature of the specific duties are so specialized and complex that knowledge required to perform the duties is usually associated with the attainment of a baccalaureate or more advanced degree.

These criteria may seem somewhat redundant, but the petitioning employer should understand them in advance and be prepared to explain which ones apply to the subject position. It is always best to include sufficient evidence in the initial petition filing to support these criteria and, if there is any question about the position qualifying as a specialty occupation, to err on the side of overinclusion.

Defining the Job

Before it prepares the H-IB petition, the employer should identify the job title and draft a narrative job description and statement of requirements for the position. Several strategic considerations come into play in this process, requiring careful attention.

First, the job title and job description should use commonly accepted terms and typical duties that specify what the specific occupational category is, and that the job is professional in nature. Typical duties that are generally professional are those which suggest application of specialized knowledge, discretion to exercise independent judgment over a function, or working at an equal level with or supervising other professional personnel. Action verbs should be used which suggest complex responsibility and judgment, such as "analyze," "coordinate," "supervise," "manage," etc. Generic statements of professional-sounding job duties should be avoided, however. Rather, the drafter should incorporate individualized specific language that accurately characterizes the job duties.

Next, the stated requirements for the job should be the employer's normal requirements for the position and must, of course, include requiring at least a bachelor's degree or higher "in the specific specialty" (or its equivalent). The employer should also include any usual experience or specific knowledge requirements for the position.

There is some latitude for what type of degree requirement is "in the specific specialty" (or its equivalent), but this will be subject to interpretation on a case-by-case basis. In a narrow, literal view of the requirement, a software engineering position would strictly require a degree in software engineering or computer science to qualify as a specialty occupation. In fact, many employers of software engineers accept a bachelor's degree in other engineering subjects in addition to computer science, perhaps with relevant work experience. The INS tends not to apply the literal view, allowing an employer's degree requirement to encompass academic subjects which are "directly related" to, but not strictly "in" the specific specialty occupation category. For example, it has tended to accept electrical or electronics engineering and mathematics as degrees sufficiently related to computer science to be acceptable for the software engineering occupation.

Beyond that, however, if the employer's range of acceptable degrees appears too broad, or does not specify a degree subject at all, the INS will question whether the job is a "specialty occupation." It might take the position that a degree in mechanical engineering, for example, is not "in the specific specialty" of computer programming, so that if the employer will accept such a degree to meet its requirement the job will not qualify as a "specialty occupation."

In practice, the "unrelated degree" issue tends to arise only in specific cases where the foreign national's actual qualifications suggest the problem. The foreign national must meet the normal professional requirements for the job, and if his or her qualifications do not appear directly related to the job, the INS may raise two objections: (1) if the job is in fact a specialty occupation, then the foreign national is not qualified for it without the right academic background or, (2) conversely, if the foreign national is acceptable to the employer with seemingly unrelated credentials, then the job requirements are too broad for the job to be a specialty occupation.

Thus, strategic drafting of the job description and requirements is important so that the foreign national's actual credentials directly relate back to the stated description. Sometimes this will mean creating a "hybrid" job description that calls for and links more than one academic specialty. For example, a position offered may be that of a software engineer whereas the foreign national's degree is in mechanical engineering. Initially, the credentials appear to be unrelated to the job. In fact, however, the petitioner might be a vendor of CAD/CAM software products for the mechanical engineering design industry, and the foreign national would use his mechanical engineering background for development of advanced new features of the product. In this case, the job description should be drafted to reflect the connection between mechanical and software engineering, using phrases such as, "the employee would apply knowledge in mechanical engineering to design software products. . . ."

In another common scenario, a person being offered a job as a computer systems analyst might have an academic background in business. The areas appear unrelated, but the job duties in fact involve designing business systems solutions for consulting clients. The job description should be written to emphasize the business aspect of the duties so that a stated requirement encompassing a business degree as an alternative to computer science will be accepted as normal and directly related to the job duties.

There are three widely used reference sources published by DOL that are available to employers to provide assistance in preparing job descriptions and guidance as to the generally accepted "normal" requirements for particular occupations. First, the Dictionary of Occupational Titles (DOT) and the Occupational Outlook Handbook (OOH) are publications compiled by the U.S. Department of Labor that include over 12,700 job titles, ostensibly representing a full range of possible occupations in the U.S. today.

The DOT, as its "Dictionary" title suggests, provides very detailed standardized job descriptions for every one of its job titles, along with a nine-digit occupational code number known as the "DOT Code" and a "Specific Vocational Preparation" ("SVP") code number which estimates the usual level of requirements for the job (everything from "short demonstration only"-obviously nonprofessional-to "over ten years"). The DOT can be viewed on-line at http://www.oalj.dol.gov/libdot.htm.

The OOH concentrates on broader groups of occupational categories, and provides more general narrative information about what workers do in those categories, typical working conditions, typical training and education needed, earnings, and expected future employment trends. The OOH includes a specific category for "Professional and Technical Occupations." Both books provide an overview of typical job duties and the general minimum requirements for each job title, and can be helpful in determining whether a particular position fits the definition of a "specialty occupation." The INS in particular will refer to these books for authority, more commonly the OOH, when it questions whether a job described in an H-1B petition should require a bachelor's degree or denies a petition not describing a "specialty occupation." The OOH can be viewed on-line at http://www.bls.gov/oco/home.htm.

The third reference is a purely on-line resource published by the Department of Labor known as O*NET. This is a database of information on job descriptions, skills, abilities, knowledge, work activities, and interests associated with approximately 950 occupations. It is intended for a variety of uses by the general public, but for purposes of H-1B petition preparation it is most pertinent for assigning a "Standard Occupational Classification" (SOC) code to each of its 950 occupations, which then forms the base list of occupations used in the "OES" on-line prevailing wage system. Prevailing wage analysis using the OES database will be discussed in detail in a later article in this series. The O*NET can be viewed at http://online.onetcenter.org/.

These reference sources can be used to suggest standard job titles that are normally recognized as professional, along with generally accepted language describing typical job duties for such positions. Employers are cautioned, however, not to rely too much on these sources. They provide good general reference background, but should not substitute for the employer's own description of its job and requirements based on its own circumstances. INS examiners have indicated that when they recognize a petitioner's supporting job description as being "lifted" verbatim from one of these sources, they immediately question the bona fides of the job offer and petition.

Finally, the employer must use the job description to prepare and submit the H-1B petition, along with its evidence that the "specialty occupation" standard has been met. The petition forms themselves require a job title and salary and a short job description, which provide the INS examiner with a first impression of whether the job is a "specialty occupation." Another form requires the petitioner to state specifically the level and subject field of the foreign national's academic degree. This reflects a new INS effort to weed out and question situations where a foreign national's degree appears unrelated to the job duties or the degree field normally required for the occupation. The employer typically provides more detail in a separate supporting letter, including a lengthier description of the job and its requirements and the foreign national's qualifications. Depending on the circumstances of the case, the petitioner might wish to include more or less detail in the job description and stated requirements, or include other independent evidence to help establish that a described job is a "specialty occupation." Suggested forms of such supporting evidence will be discussed in the next article in this series.

B. More On Making Your Case For An H-1B "Specialty Occupation"

Straightforward Specialty Occupations: The "Easy" Cases

As a reading of the legal definition quoted in the previous article suggests, there are several fields which the H-1B regulations expressly recognize as involving "theoretical and practical application of a body of highly specialized knowledge," so that jobs in these fields are essentially recognized as per se specialty occupations. These include:

architecture

engineering

mathematics

physical sciences

social sciences

medicine and health

education

business specialties

accounting

law

theology

the arts

Some of these fields use specific job titles such as architect, engineer, doctor, teacher, accountant, or lawyer. Others are more general areas such as "business specialties" and "the arts," calling on the petitioner to identify an appropriate job subtitle that is included within the field. The "engineer" title subdivides into separate engineering disciplines such as electrical engineering, mechanical engineering, and software engineering.

For petitions in these recognized fields, the employer should include its job description and statement of requirements as described above, and the balance of the petition will generally be straightforward and approvable, provided that the information provided is not unusual nor inconsistent with the Labor Condition Application and the beneficiary's qualifications.

It is always to the employer's advantage, where possible, to use the most straightforward, generally recognized, appropriate professional title for a job. Some employers tend to use more individualized, uncommon-sounding titles tied to a particular in-house function or a preferred scheme of internal organization. An unusual title that does not immediately specifically identify a job may cause confusion or delay because the INS examiner will have to probe deeper in the supporting evidence to see if the job is really a specialty occupation.

For example, a software development company might use the title "technical account manager" for a position that requires a qualified software engineer to be on call to work with a specific group of clients whenever they need professional software engineering services related to the company's product. In another example, a growing Internet company might assign the title "business development specialist" to a person charged with undertaking the computer programming necessary to develop a new function for the company's e-commerce web site and put it on line. In both cases the H-1B petition should be approvable as involving computer-related specialty occupations once the examiner reviews the actual job description. However, the respective titles do not clarify the job function, and actually suggest sales management or other business duties rather than computer occupations. In this example, using a straightforward "software engineer" title would avoid any question and help expedite processing of the case. Or the employer might use its internal title followed by the broader occupational category in parentheses, such as "technical account manager (software engineer)."

This technique is particularly helpful for small companies, startups, or growing businesses in a new sector area of the economy, which tend to operate informally and have many people performing multiple functions with less-defined jobs and hierarchy. As these businesses grow and mature, development of more formalized job descriptions with regular professional titles is a good strategy that will position them more easily to sponsor H-1B workers.

Establishing the "Specialty Occupation" in Complex Cases

In other job situations the "specialty occupation" standard might not be so clear. These cases require more thorough analysis of the job circumstances, and careful attention to gathering additional evidence and preparing good arguments. There are a number of resources that the employer can turn to, including the Department of Labor references described in the previous article, evidence of normal industry practices, particular details about the specialized duties of the position offered, and the employer's own usual hiring practices for the position.

One aspect of the "specialty occupation" argument that requires more attention occurs when an employer's job category arises in a new sector of the economy, and does not fit into any pre-existing standard definition. The DOT and OOH publications are good starting points to find evidence that a position is professional, but the information they contain is frequently out of date. The current fast-paced information age fosters rapid change in the American workplace, in which completely new types of jobs are being created. Even for traditional jobs the minimum requirements needed to perform job duties are becoming more complex. These changes occur faster than they can be documented in traditional reference sources.

Other situations which may require more careful attention include the following:

Where the pay appears to be quite low, even though the beneficiary has strong academic credentials and/or experience. This is frequently a problem for small, nonprofit organizations. For example, an organization providing health and welfare services to the homeless in the inner city requires that its program managers have advanced degrees in social work or public health so that the managers actually perform at a very high professional level but may earn an average of only $30,000 to $40,000. The persons holding these positions are not in their professions for money, but for the satisfaction of helping the organization meet its mission. To an INS examiner who does not understand this, the initial reaction is that the position must be nonprofessional.

Where the closest job description fit in the DOT or OOH publications is actually a nonprofessional position, but the employer feels that its circumstances are unique and involve a much higher level of specialized knowledge than that recognized in the reference sources, thereby justifying a B.S. requirement. For example, one of the country's top veterinary hospitals requires a B.S. in biology or animal sciences for a veterinary assistant position. The DOT, however, lists veterinary assistant as a nonprofessional position not normally requiring a B.S.

Where the job requirement is only for a general liberal arts degree, or the foreign national's actual academic background involves such a degree. Unless the job is specific to the degree, such as with an English teacher, historian, or sociologist, it becomes hard to justify a job as a "specialty occupation" that accepts any general liberal arts background. An economics background is somewhat easier to fit into a business/market research position, but still requires a carefully drafted job description.

In reality, any position that does not fit into the per se list above should be scrutinized carefully under the criteria described in this subsection.

The key to classifying a position as a specialty occupation in these complex situations will be performing a more expansive strategic evaluation of the position in connection with preparing the job description, using the supplemental criteria suggested by the regulations quoted above. By examining the specific industry to which the position belongs, the current hiring standards of that industry, the complexity of the duties to be performed, the employer's consistent hiring standards, and the bona fide business reasons behind those standards, it can often be clarified why a baccalaureate degree or its equivalent is a necessary requirement for the subject position.

It is to the employer's advantage to perform a strategic analysis before preparing the H-lB petition. Once the employer gathers the evidence, it can then be satisfied that its job meets the INS standard, and make an informed judgment about how much evidence to actually submit to the INS. Without this preparation, the employer may be required to gather evidence in response to an INS "Request for Evidence" ("RFE") sent after initial review of the petition. The Request for Evidence typically states that the petitioner's initial submission did not establish the position to be a specialty occupation, and asks a series of detailed questions based on the regulatory criteria. By the use of careful issue-spotting and planning, the petitioner can prepare an initial submission that will be approved upon submission without amendments, and avoid the extra delay and expense of responding to a Request for Evidence.

Additional Criteria

The Code of Federal Regulations sections quoted previously suggest a set of particular criteria around which the petitioner can focus its supporting evidence. Some of the criteria appear objective, calling on the petitioner to justify its degree requirement through reference to common industry practice or evaluation of the position from independent sources. Others are more subjective, focusing on particular characteristics of the employer and its practices. Restated, the criteria are:

"A baccalaureate or higher degree or its equivalent is normally the minimum requirement for entry into the particular position";

"The degree requirement is common to the industry in parallel positions among similar organizations";

"The nature of the specific duties are so specialized and complex that knowledge required to perform the duties is usually associated with the attainment of a baccalaureate or higher degree"

"The employer normally requires a degree or its equivalent for the position"; and

The employer's "particular position is so complex or unique that it can be performed only by an individual with a degree."

The first of these criteria applies to professions where it is commonly accepted that a bachelor's degree appropriate to the profession is the normal minimum requirement, and where the petitioner can otherwise establish that a bachelor's degree or higher is generally accepted to be the minimum requirement.

As described above, the best place to begin accurately to depict this description is in the job title itself. Beyond that, the job duties and subject area of the required degree as described in the supporting evidence must be consistent with the normal duties and requirements associated with the profession.

The second criterion becomes important where a position does not necessarily fit into a standard occupational category in the common reference sources, where it does fit into such a category but standards in the industry have changed, or where the INS may not be satisfied with reference to those sources and asks for more particularized information. In this criterion the focus is on actually gathering evidence from "similar organizations" - i.e., other employers in the same business - about their degree requirements for positions "parallel" to the one at issue, to show that the degree requirement is "common to the industry" for the job.

It might be sensitive or difficult to approach competing businesses for this type of information. If a relevant trade association exists, that is the best place to start. Companies in the same line of business should recognize that it is in their long-term interest to create a record whereby the INS has accepted a common position as a "specialty occupation," even for a competitor. If an employer does not wish to approach other businesses for help, it might be able to find publicly available sources of information that will support the point.

Specific types of evidence that can demonstrate the common industry standard include the following:

Letters from human resources or other responsible officers in companies in the same business as the petitioner stating that they in fact employ personnel in the same position, and require a relevant bachelor's degree for the job. The letters should include recent hiring data, if available.

A statement from a professional or trade association in the petitioner's business that a bachelor's degree or higher is, or has become, the common and normal minimum requirement for the particular position in the industry.

Copies of print advertisements, Internet job listings, or other recruitment information from other companies showing a bachelor's requirement for the same position.

Articles in professional journals specific to the industry which state that a bachelor's degree or higher is, or has become, the minimum requirement for the position.

A statement from an expert in the field which indicates that, within businesses such as the petitioner's, a position of the type offered ordinarily requires a bachelor's degree.

The third and fifth points are essentially the same. They focus on characteristics of the position itself, and involve arguing that regardless of the other criteria, the position described in the petition is unique and so specialized and complex that by its very nature it requires attainment of a bachelor's degree or higher in the specialty. As a strategic matter, it is easier for the employer to make objective arguments based on the regular reference sources or "common industry practice" points described above. However, certain circumstances might indeed involve such specialized and complex duties that the average requirements of the occupation from other sources do not provide suitable comparison. In these circumstances the job description provided in the supporting evidence assumes greater importance.

To successfully use the "complex and unique duties" strategy, the employer must provide a job description that is extremely detailed, covering every conceivable relevant point about the employer, its products or services, the precise day-to-day duties of the position, and what makes them complex and unique. As suggested above, the duties should emphasize:

specialized knowledge and/or skills,

independent responsibility,

discretionary decision-making authority,

working with other professionals, supervision of other professionals,

long-term goals and expectations,

high-level reporting/accountability structure, and

any other information the employer feels is helpful.

Other helpful petition drafting points, which have been briefly described above, are:

Use action verbs that convey the higher level of complexity, responsibility, and exercise of judgment necessary to perform the job duties. The following examples are recognized in the DOT: "synthesizing," "coordinating," "analyzing," "mentoring," "negotiating," "instructing," "supervising," "setting up," "precision working," and "controlling."

Incorporate detailed descriptions of the particular specialized skills, knowledge, and use of equipment that are required to perform the duties, with an explanation of why such abilities cannot generally be acquired without a bachelor's degree.

Explain the uniquely specialized, complex, or high-quality nature of the products or services the employer provides compared to any general industry standard, to differentiate the position from those with less sophisticated employers. As an example, in the veterinary assistant case described above, the employer could rely on this strategy to argue that:

the veterinary assistant job description in the DOT, identified as nonprofessional, reflects a position at a rural agricultural clinic, in routine farm-animal care, whereas this employer is one of the top veterinary hospitals in the country in a major East Coast city, providing the highest level of care for animal patients;

because of this unique situation, this hospital deals only with the most challenging and specialized animal care problems;

its veterinary assistant positions involve unique and complex duties to assist veterinarians in a wide variety of challenging care problems, and in fact its assistants function like physician assistants in human hospitals, a job that is regularly recognized as professional; and

for these reasons the employer has always required a bachelor's degree in biology or animal science.

The employer may also obtain an independent expert "Position Evaluation" report about the job to support its argument. The expert should be a recognized authority in the particular field, or be qualified as an expert in human resources or occupational analysis. He or she will review all the particular duties of the position, and offer the opinion that they involve such a level of specialized knowledge, complex decision making, and independent responsibility that a bachelor's degree in the appropriate field would normally be a prerequisite. For example, in the nonprofit homeless service organization case, a professor at a graduate school of public health who is familiar with the organization and its work could provide a letter certifying that the position of program manager is indeed a professional position involving a substantial amount of specialized knowledge and independent responsibility despite the low, nonprofit pay scale.

Finally, regarding the fourth point, the employer would demonstrate that regardless of the other criteria, it has always required a bachelor's degree or equivalent for the position. For large employers, this can be presented in the form of statistics about past hiring practices in the position and the educational qualification of current employees. For smaller employers, a simple list of current or past employees in equivalent positions and their educational backgrounds will suffice. Other documents submitted to support this criterion of evidence could include:

Job requisition/description pages in the company's employee handbooks specifying different positions available and the minimum requirements.

Copies of print advertisements, Internet postings, and other recruitment material of the employer showing a consistent pattern that the employer has stated a bachelor's degree requirement for the position.

This last point essentially functions as back-up for the other arguments. The employer's stated degree requirement alone, even if supported by past practice, will not automatically establish that a job is a specialty occupation; it must still show that the duties of the position require theoretical and practical application of a body of specialized knowledge. For example, a high-end retail store in a resort town area might require a bachelor's degree for a store manager position, and might be able to show that it has prior thereto only hired persons with bachelor's degrees. The store could defend its hiring policy by adding that in the past, college-educated employees have been more trustworthy and reliable than less-educated employees, and that it has no trouble recruiting people with college degrees because the town attracts an educated population seeking a relaxed, enjoyable lifestyle. Such an argument would not qualify the position as a "specialty occupation" because it would not have been shown to involve the type of specialized knowledge and complex duties normally associated with a professional position that requires a bachelor's degree in an appropriate specialized field.

Similarly, if the employer requires simply a bachelor's degree with no regard for a particular area of concentrated study, the job may not satisfy the specialty occupation standard. The employer may truthfully say that it has always required a bachelor's degree, but admit upon review that it has accepted degrees in a wide variety of subject matters. Unless the employer can demonstrate how each of the major fields of study it has accepted are specifically relevant to the specialized duties in the position, then this evidence of prior hiring practice will not be helpful and might in fact hurt the petitioner's case.

The following discussion of selected categories of occupations is not meant to be exhaustive but is, rather, a selection of categories which have historically presented problems or otherwise raise interesting issues in preparation of H-1B petitions.

Computer Programming and IT Related Positions

Some years in the past, it was common for the INS to question whether a position characterized as "computer programmer" was a professional, "specialty occupation" position. The concern dated back to when most computers were large main-frame systems, and a "computer programmer" commonly performed duties of a more rote nature that today would be characterized as data entry or computer operations which typically required a course of technical, nonacademic training. Although such a characterization is less common today, formerly the INS regularly denied H-1B petitions for "computer programmer" positions where, upon close review of the job duties described in the petition, it determined that the position was nonprofessional.

Now, as the computer systems and information technology revolution has swept through all levels of business, the INS generally recognizes that the nature of typical duties in computer programming have changed and become more complex and specialized, so that bachelor's-degree training should be necessary. It is now normal INS policy to accept a computer programmer position as a "specialty occupation."

A December 2000 memorandum prepared by the Director of the Nebraska Service Center of INS confirms this view. The memo noted that computer programmers and programmer/analysts were examples of occupations "in transition" from non-professional to professional status, and had suffered from inconsistent adjudication results. It instructed examiners at the Center that they should generally consider the position of programmer to qualify as a specialty occupation. This will especially be true, the memo noted, if the position involves "providing clients with programming/analysis, custom designs, modification and/or problem solving of software." It followed that "higher level positions such as programmer/analyst, software consultants, and computer consultants would also qualify for specialty occupation status." On the other hand, the memo continues, "positions strictly involving the entering or review of code for an employer whose business is not computer related (does not furnish software or hardware development, production and/or consulting) may require more careful scrutiny" and would remain an example of a lower level position where a 2 year degree or certificate would be an acceptable qualification, and therefore the position would not qualify as a specialty occupation.

However, a petitioner must still submit a properly detailed job description for such a position, outlining the particular specialized knowledge and duties in its particular position. Typically, this should include at least mention of the specific software languages, tools, libraries, and operating systems that the beneficiary will use, and a description of the types of development projects he or she will undertake.

Interestingly, even as the old INS concern over the "computer programmer" job title seems to have been resolved, the advent and expansion of the Internet and related developments have led to renewed scrutiny by INS adjudicators of other, newer categories of computer-related positions. In a meeting with AILA representatives, adjudicators at the California INS service center expressed concern that the explosive growth in demand for web site development and the purported ease with which a web site can be created and programmed had caused a shift in the nature of certain computer positions back to being nonprofessional, at least those where web site design is listed as the primary activity. Apparently, this view comes from commonly circulated stories about high school students, college drop-outs, and others who have not completed a four-year technical degree embarking on careers in web site development and becoming quite successful, as well as employers making statements to the effect that a college degree is not necessary to make it big on the Internet, just a few basic technical skills which can be self-taught and a desire to get ahead. Accordingly, H-1B petitions for web site developers and similar positions have occasionally been questioned or denied.

At this time the best advice is that employers be aware of the constantly shifting nature of typical job categories and qualifications in the information technology world and, to the extent possible, use the more traditional computer-related job titles and described duties that have come to be accepted as meeting the "specialty occupation" standard, like Software Engineer, Systems Analyst, Programmer/Analyst or Computer Programmer.

For example, for the web site development specialist, a "software engineer" or "programmer/analyst" title with duties to "analyze, develop and program Internet-based applications, using C++, Java, HTML, and XML," will appear more straightforward to the INS than a position simply entitled "web site developer."

There is an interesting history of non-precedent decisions from the Administrative Appeals Unit illustrating that up to 1999 Service Centers continued to deny H-1B petitions for computer programming and similar occupations, and were then overturned on appeal. These decisions are instructive strategies in preparing H-1B petitions for these kinds of jobs now. Following is a summary:

In 1995, the AAU overturned a denial from the California Service Center and approved specialty occupation classification for a Director of Technology for a computer control systems firm, where the position described was analogous to the group of occupations described in the 1992-93 edition of the OOH as "engineering, science and data processing managers," which were stated to normally require a baccalaureate degree in the field.

In 1997, the AAU overturned a denial from the Nebraska Service Center and approved specialty occupation classification for a position of computer programmer for a firm which develops and markets cross-industry application software, where the duties of the position "appeared to be analogous programming with scientific applications" contained "elements of software engineering and systems analysis."

In 2000, the AAU overturned a denial from the Nebraska Service Center and approved specialty occupation classification for a position as a software design engineer for a software development and support firm, on a project assigned to Microsoft Corporation.

Also in 2000, the AAU overturned a denial from the Vermont Service Center and approved specialty occupation classification for a position of programmer/analyst for a computer consulting firm.

Management and Executive Positions

Management and executive positions constitute another area in which INS has historically had problems acknowledging the "specialty occupation" nature of a position, causing unpleasant surprise when a petitioner had assumed that a position's high level of responsibility and generous salary made the point obvious. In one frequently discussed example, the INS denied an H-1B petition for a vice president in charge of manufacturing, despite the position's high level of supervisory authority and salary of over $150,000.

The INS is concerned that such a position could be held by someone who begins at a nonprofessional level in the company hierarchy, such as a maintenance supervisor or manufacturing technician, and who works his or her way up the ladder to a management or executive level on the basis of good organizational and people skills and accumulated knowledge of the organization. In this scenario a four year academic degree in a relevant subject is not a necessary qualification and the position does not involve "theoretical and practical application of a body of highly specialized knowledge," despite a high level of responsibility and overall importance to the business.

Thus, approval cannot be taken for granted simply because a petition describes a manager/executive-level position with significant pay. Two points are important. First, the petition should give a clear description of the function or level of personnel the manager/executive will supervise. The function should itself be one inherently involving specialized knowledge such as finance/accounting, market research, or engineering. In sales or manufacturing management positions, where the underlying function may not appear to be professional, the petition should highlight any specialized technical or engineering knowledge deriving from the nature of the particular product or service. A manufacturing or sales management position for a company which manufactures high-tech semiconductor laser components or provides engineering consulting services will be more readily accepted as a specialty occupation than one involving nonspecialized products or services. If the personnel supervised by the position are themselves specialized professionals, such as accountants or engineers, that will also be persuasive that the managerial position is by definition a specialty occupation.

Second, the petition should highlight the employer's actual academic requirement for the position, and the basis for the requirement. Many employers will require a business or management degree for personnel serving in a variety of management functions, for example, because they want to hire professionals who can apply outside academic training in modern management practices to a crucial function. Or a degree in the underlying specialty such as engineering may be required. The petition should also point out the employer's prior practice of hiring persons with the relevant degree at the same level.

As a practical matter, this issue will be most problematic for small businesses, where the INS may view a petition as overstating the job description and requirements for a manager who will actually perform multiple functions that might not all be professional.

Sales Personnel

Sales positions generally are not professional unless the petitioner can demonstrate that the position involves "specialized knowledge." This will be most readily accomplished where the product is highly technical or complex, such as in large-scale computer software, engineering, scientific, or medical areas. The petitioner must carefully describe the specialized knowledge inherent in the position, and be able to show that a degree requirement in the specialty area is consistent with prior hiring.

In many complex technical areas the salesperson is a qualified engineer who works with the customer to develop a specialized application or engineering solution involving the product. In such a scenario it will always be to the petitioner's advantage to use a "sales engineer" or similar technical title rather than the generic "sales representative."

Technical Translators

Foreign language translation and/or interpreting is another area in which the INS has a historic record of denying H-1B petitions on the basis that the positions are not "specialty occupations." The concern results from a perception that translation and interpretation merely require fluency in two languages, a skill which may come from a person's family upbringing or precollege education.

Petitions for these jobs are regularly approved, however, for translation/interpretation in highly specialized technical translation firms. Such firms normally require at least a bachelor's degree in translation/linguistics, or in a technical area that will be the subject of translation work, such as engineering, business, computer science, or medicine. Baccalaureate-level degrees in translation are not frequently earned in the U.S., but are common in Europe and South America where business is carried on at all levels of society in multiple languages so that an ability to produce fast, accurate translation of important business, legal, or technical documents is a highly valued professional skill. As the U.S. economy becomes more global, demand for this skill has increased sharply.

To be successful with H-1B petitions for these personnel, translation firms should include special evidence in two areas. First, they should provide a detailed description of the specialized knowledge inherent in the translation work. They should describe the nature of the documents and the clients for whom the work is performed in order to show that the work is highly specialized technical translation in professional areas such as computer software documentation/ localization, other engineering/technical subjects, medicine, law, business, or finance. The petitioner should describe the importance to its clients of the translation product's accuracy and cultural sensitivity. In business, legal, or technical documents, for example, major consequences can depend on fine nuances in the meaning of single words. For these reasons, the petitioner should argue, the work could not be satisfactorily performed by a person having merely fluent language skills, and instead requires the specialized academic background as well. The position should be analogized to that of a technical writer in a specialty area, which normally requires academic qualification in the subject.

Second, petitioners should include objective evidence supporting the academic requirement. This would include specific statistics or other representations as to the academic backgrounds of other persons serving in technical translation positions, to show that the employer has consistently required an appropriate degree and has not accepted persons possessing only language skills and nothing more. It is also useful to obtain statements from independent experts in the translation field certifying that, based on the nature of the documents to be translated and the client base, the petitioner's translation position is sufficiently specialized so that a bachelor's degree should normally be required.

Arts Positions

Individual artists in the U.S., arts organizations, and arts-related businesses frequently wish to assist foreign artists to obtain proper immigration status in the U.S., and inquire whether sponsorship in an H-1B position is appropriate. The H-1B program can be useful for such petitioners, but there must be a bona fide full- or part-time job offer in a "specialty occupation" position. There is no specialized job description for an "artist" to allow a beneficiary simply to live in the U.S. and practice his or her art on a self-employed basis. However, an artist with appropriate academic training may qualify for a variety of more easily defined professional positions in the arts field such as gallery or museum curator, editor or writer for an arts publication, arts administrator for an organization or institution, teacher or "artist-in-residence" instructor for a school, etc.

Nursing

Since the expiration of the H-1A special nonimmigrant classification for Registered Nurses in 1995, practitioners and employers of nurses have sought aggressively to establish that such positions qualify as H-1B specialty occupations. Unfortunately, in most instances they do not. Anticipating the question, INS issued a memo in November 1995 in which it referenced the OOH to note that "there is no industry-wide standard that a registered nurse have a baccalaureate degree to perform the duties of a professional registered nurse" and that in many states the normal qualification for a nursing license is successful completion of only a two-year program and passage of the licensing examination. On that basis, the memo indicated that "it does not appear that many H-1A nurses will be eligible for H-1B classification."

The memo did indicate that nursing positions may be approvable for H-1B specialty occupation classification on a case by case basis where a petitioning hospital can establish that in the past it has hired only registered nurses possessing a bachelor's degree or higher. This argument would require detailed evidence of the petitioner's past hiring practice as well as hiring practices of similar hospitals.

In 2000, a U.S. Fifth Circuit Court of Appeals decision upheld the denial of 7 H-1B petitions for registered nurses filed by a medical contract service agency, which provided contract nursing service to hospitals and medical providers. The petitioner argued that it had always required a B.S.N. (Bachelor of Science in Nursing) degree, and had submitted evidence of its hiring practice. However, the court accepted INS' argument that a proper inquiry is into what the client contracting facility required, and the petitioner failed to establish that the medical facilities where the nurses would actually work required bachelor's degrees. Therefore, the petition denials were upheld.

It is still be possible to obtain "specialty occupation" H-1B approval for a nursing position, with good advocacy. However, the petitioner should be prepared to show that (1) the position is not a routine nursing position but rather a higher level nursing position with specialized duties that call for additional academic training, such as in an operating room or as a nursing supervisor, (2) it has always required a bachelor's degree for the position, as shown by evidence of hiring practice, or if the petitioner is a contract medical service provider the client has always required the degree, and (3) it is the objective standard in the medical field in the area to require a bachelor's degree for the level of position, as shown by hiring practices at other hospitals, or an expert opinion report.

In a 1994 AAU decision, the position of Team Leader/Nurse was accepted as a specialty occupation. Medical Technologist, Medical Research Assistant and Physician's Assistant are other positions that have been approved for the classification.

Other "Specialty Occupation" Decisions

Following is a summary of other recent decisions of the AAU or federal courts in noteworthy "specialty occupation" cases:

In 1998, the AAU overturned a denial from the California Service Center and approved specialty occupation classification for a position as a Foreign Law Consultant for a consulting services firm, in a position that involved advising clients on Armenian law.

In 1998, the AAU overturned a denial from the California Service Center and approved specialty occupation classification for a position as a Montessori pre-school teacher, for a classroom of ages 3-6. The decision found the position to be that of a school teacher as described in the OOH.

In 1998, the AAU overturned a denial from the Vermont Service Center and approved specialty occupation classification for a position as a mechanical engineer in an auto wheel alignment shop. On appeal the employer explained that the job involved installing and servicing specialized computer wheel alignment equipment to other wheel alignment establishments.

In 1999, the U.S. District Court for the Eastern District of Louisiana overturned a denial from the Nebraska Service Center, which had been upheld by the AAU, and approved specialty occupation classification for a position as a concert violinist for the Louisiana Philharmonic Orchestra.

In 1999, the AAU upheld a denial from the Nebraska Service Center for a position of journeyman pattern-maker for a firm which manufactures molds and patterns. The AAU found the described position equivalent to a combination of engineering technician and tool and die maker as described in the OOH, which do not require a bachelor's degree. There was also no evidence submitted that the beneficiary in fact qualified for any specialty occupation.

In 1999, the AAU upheld a denial from the Vermont Service Center for a position of Media Planner for a small jewelry design firm, involving "planning, coordinating and directing advertising and marketing campaigns for the company." The AAU found the described position equivalent to a combination of the positions of general manager or executive and marketing or advertising manager, as described in the OOH. The OOH, stated the decision, "finds no requirement of a baccalaureate or higher degree in a specialized area" [emphasis in original] for either position, instead accepting degrees in Business or Liberal Arts equally. Thus the subject position in the petition did not qualify as a specialty occupation. This case illustrates the difficulty with general manager positions discussed above.

The H-1B Beneficiary's Required Qualifications

The Legal Standard

Not only is it fundamental to an H-1B petition that the position offered be in a specialty occupation, it is equally important that the beneficiary be "qualified to perform services in the specialty occupation because he or she has attained a baccalaureate or higher degree or its equivalent in the specialty occupation."

For a beneficiary who has the required bachelor's degree in the relevant specialty, qualifying for H-1B status is usually straightforward. For others, the "or its equivalent" language provides a fair measure of flexibility in demonstrating appropriate professional qualifications. The professional requirements for a specialty occupation may be met through education, professional experience, or a combination of education and experience. INS regulations spell out the methods of qualifying in detail:

"(C) Beneficiary qualifications. To qualify to perform services in a specialty occupation, the foreign national must meet one of the following criteria:

"(1) Hold a United States baccalaureate or higher degree required by the specialty occupation from an accredited college or university;

"(2) Hold a foreign degree determined to be equivalent to a United States baccalaureate or higher degree required by the specialty occupation from an accredited college or university;

"(3) Hold an unrestricted State license, registration or certification which authorizes him or her to fully practice the specialty occupation and be immediately engaged in that specialty in the state of intended employment; or

"(4) Have education, specialized training, and/or progressively responsible experience that is equivalent to completion of a United States baccalaureate or higher degree in the specialty occupation, and have recognition of expertise in the specialty through progressively responsible positions directly related to the specialty."

The United States or Foreign Baccalaureate Degree

The most straightforward way to qualify for H-1B classification is by earning a standard four-year bachelor's degree or higher from an accredited U.S. college or university. The INS will generally not question the academic merits of a particular institution so long as the degree is issued by an accredited college or university.

The petitioner must submit certain documentary evidence to INS to prove that the U.S. bachelor's degree was awarded, usually copies of the diploma and academic transcript. It is particularly helpful to include the transcript for very recent graduates, to show that the beneficiary has taken the requisite courses in the specialty occupation field. If the diploma has not been issued yet but the person has completed the degree, then a copy of the transcript showing the degree awarded may be submitted in combination with a registrar's letter certifying that the person will receive a diploma at the next commencement.

Using a foreign baccalaureate or higher degree to qualify can also be straightforward, provided that the foreign degree is "determined to be equivalent to a United States baccalaureate or higher degree." The INS makes this determination in the course of adjudicating the petition. This generally requires submission of "[a]n evaluation of education by a reliable credentials evaluation service which specializes in evaluating foreign educational credentials." In the report, a knowledgeable expert reviews the foreign credentials, and states the level of academic achievement in the U.S. with which the credentials equate.

There are many foreign education credential evaluation service firms in the U.S. Evaluation personnel at these services often are former professors or university officials whose academic responsibilities had included evaluating foreign educational credentials for determining admissibility to U.S. graduate degree programs. Evaluators base their reports on certain standard references in the field of international education that publish detailed descriptive information on university programs around the world. In addition to advising H-1B petitioners and immigration lawyers, these firms serve academic institutions, state licensing boards, employers, and government agencies needing evaluation of a candidate's foreign background.

In the 1980s the INS listed approved evaluators, but it has since stopped this practice and now expressly declines to endorse or recommend "reliable" credentials evaluators. Instead, it simply tells petitioners that "many private individuals, organizations and educational institutions provide this service." It does have a set of stated criteria for the education evaluation report, according to which the evaluation should:

"(i) Consider formal education only, not practice experience.

"(ii) State if the collegiate training was post-secondary education, i.e., did the applicant complete the U.S. equivalent of high school before entering college?

"(iii) Provide a detailed explanation of the material evaluated, rather than a simple conclusory statement.

"(iv) Briefly state the qualifications and experience of the evaluator providing the opinion."

The National Association of Credential Evaluation Services (NACES) is a professional association of foreign credential evaluators. NACES has established certain standards and qualifications for performance of evaluation services that member firms must meet.

Generally, the INS takes credential evaluations at face value. As the number of evaluation services has grown in recent years with increased demand for preparation of H-1B petitions, however, the INS might in the future establish more specific standards for credential evaluations and seek more information about the basis of a determination and the qualifications of the evaluator.

The actual requirements for documentation of a foreign degree are the same as for documenting a U.S. degree, but in practice the INS will be stricter in scrutinizing documentary evidence of credentials from certain countries. In all cases the petitioner should have the diploma, any related certificates, and a complete transcript. Copies are acceptable to submit to INS, but all the information, including any official stamps or seals, should be legible. Documents not in English must be accompanied by a certified translation.

The education evaluation report should identify the documents reviewed, summarize the education credentials they represent in the foreign system, compare those credentials with what is typically required for that level of education in the U.S. system, and offer an expert opinion as to the equivalent degree credentials and subject area in the U.S. If the subject area of the degree is not precisely the same as the "specialty occupation" in which the foreign national will work, but there is a minor concentration of course work in that area shown on the transcript, the evaluator should specifically include discussion and evaluation of that course work in the report.

There have been particular difficulties in recent years at INS and at U.S. consulates abroad regarding documentation of education credentials from certain institutions in India and countries of the former Soviet Union due to the submission of numerous fraudulent credentials in H-1B petitions from those countries. The difficulties may arise at several steps in the H-1B process. United States consulates in India, Russia, and Ukraine, for example, have commonly delayed or even refused issuance of H-1B visas to applicants for whom H-1B petitions were already approved at the INS in order to conduct independent investigations to check whether an applicant had a claimed degree by contacting the relevant institution. To expedite this process the U.S. consulate in Chennai, India, now uses lists of graduates it has obtained from various academic institutions in India to verify claimed degrees.

The INS has also delayed processing of individual H-1B petitions while it referred a request to the U.S. consulate in the beneficiary's home country to conduct an independent credentials verification. Alternatively, the INS may issue a Request for Evidence to the petitioner seeking a currently dated certified letter or affidavit from the university registrar confirming that the institution's official records show the person earned the degree he or she claims, and that the diploma and transcript offered are true and accurate. Finally, H-1B beneficiaries with Indian academic credentials who changed or extended status in the U.S. have been questioned about the authenticity of their credentials when applying for H-1B visas at U.S. consulates in Canada and Mexico, and in some cases were refused visas with instructions that they must reapply in their home country, where the credentials can be verified locally.

These problems have occurred in only a minority of cases. Still, it is prudent to have complete, certified official documentation for all foreign academic credentials, particularly credentials from India and former Soviet Union countries such as Russia and Ukraine, including a current registrar's certification if available. In addition, when an H-1B beneficiary visits a U.S. consulate he or she should always bring original academic documents, not copies, particularly when visiting a consulate in Canada or Mexico as a "third-country national."

To be deemed equivalent to a U.S. bachelor's degree, the INS requires a foreign degree to have the same underlying prerequisite requirement-completion of a secondary program equivalent to U.S. high school plus the equivalent of a full four-year college or university academic program. The INS assumes that U.S. bachelor's degrees are issued upon completion of a four-year program of 120 credits, or thirty credits per academic year, and this standard is applied for determining whether the foreign national has completed an equivalent of four years of full-time college study abroad. Expert evaluators are expected to apply these standards in reports submitted to the INS.

One problem in this area concerns foreign nationals who have certain degrees recognized as baccalaureate in their countries but which require only three years of full-time college study. This is common, depending on the subject area of the degree, in education systems of India, South Africa, parts of Canada, the United Kingdom, and certain eastern European countries, among other locations. For example, in India the degree entitled "bachelor of science," which is issued in traditional academic subjects such as math, physics, or chemistry, involves only three years of study. The degrees "bachelor of technology" and "bachelor of engineering," in contrast, which are issued in engineering and technical subjects such as computer science or electronics engineering, are full four-year programs. In Canada, the U.K., and South Africa, the "B. Tech" degree commonly involves just three years of study.

Strategies to deal with this situation vary. The Indian three-year degree is generally not recognized as equivalent to a U.S. bachelor's degree, so that additional qualification based on experience or further training is necessary. If the foreign national has obtained a graduate --academic degree in the Indian system such as a master of science or postgraduate diploma, an evaluator can issue a report based on the combined years of study which should be equivalent to at least a U.S. bachelor's degree. Otherwise, as discussed below, the foreign national must obtain at least three years of professional experience in the specialty area, verified by reference letters, to compensate for the missing year of education.

Depending on the individual circumstances, an evaluator may describe a three-year degree from the U.K., Canada or South Africa as a "functional" equivalent of a U.S. bachelor's degree. Such degrees typically involve the same level of course work in a major area of study as the U.S. degree, and lack only the equivalent of elective and distributive nonmajor courses in the U.S. system. The INS has rejected such degrees and the "functional equivalent" rating, however, in strict adherence to the four-year equivalency rule.

Still other three-year degrees have expressly been recognized by the INS as equivalent to a U.S. bachelor's degree, such as the British higher national certificate and the Canadian bachelor of technology. In Canada graduates commonly attended a thirteenth grade of high school, so that after completion of three years of university study they have the same total years of academic preparation as a U.S. student who attends twelve years of high school and four years of college.

The H-1B petition may be submitted without a foreign credential evaluation report if the petitioner argues in its supporting letter that, on their face, the foreign educational credentials are equivalent to U.S. academic credentials. The INS ultimately makes the determination of equivalency, and it is within the adjudicator's discretion to waive the evidentiary requirement of an evaluation report. Historically, the INS will accept certain high-level foreign degrees without an evaluation report, generally from well-recognized, prestigious institutions in Canada or Europe. In general this strategy is not recommended, though, because avoiding the modest expense of an evaluation report would not justify the risk of a several-week delay while the INS sends a Request for Evidence asking for an evaluation and the petitioner then obtains one.

Importance of the Baccalaureate Degree Subject Matter

Having determined that the foreign national candidate has a U.S. or foreign equivalent bachelor's degree, the petitioner must focus on the importance of the degree's subject matter and its relation to the specialty occupation.

Under one formulation in the regulations, the foreign national's U.S. or foreign equivalent bachelor's degree must be "in the specialty occupation." Under another more flexible formulation appearing elsewhere in the regulations the foreign national must hold "a" baccalaureate or higher degree "required by" the specialty occupation, which suggests a less literal approach whereby the degree may be in any subject area that is considered a usual requirement or qualification for entering the profession, rather than one where the degree subject precisely matches the job title.

In practice, H-1B adjudicators at INS apply a standard of whether the subject matter of a foreign national's degree is "directly related" to the position's duties. Thus, for a software engineer or programmer/analyst position, the foreign national will meet the qualification with a degree in computer science because that subject is clearly "directly related." Conversely, if the foreign national's degree is in history or English, he or she will not meet such an H-1B requirement based on an academic degree because those subjects are not related to the position at all. A large number of cases will fall into a middle ground where the foreign national's degree is not precisely "in" the subject area of the job, but the petitioner is willing to hire the person because it considers the degree to be sufficiently related. In these cases the petitioner should explain in its supporting documentation how the degree is directly related to the job and, where appropriate, supplement the documentation with other evidence of the foreign national's qualifications in the specialty occupation such as letters verifying professional experience in the occupation or certificates/transcripts showing specialized training. These types of evidence are described in more detail in the next subsection.

Often a foreign national being offered a position as a software engineer or programmer/analyst has an engineering degree in a subject other than computers such as electrical engineering, mechanical engineering, or civil engineering, or in another noncomputer but technical academic subject such as mathematics, chemistry, or physics. Or a foreign national with a liberal arts degree in a subject such as economics or history is offered a business, marketing, administrative, or writing position.

In these situations INS has indicated that it does not apply a concrete set of rules regarding what degree subjects are considered directly related to what general specialty occupational categories. Rather, it applies a case-by-case analysis to each petition, which gives the petitioner the opportunity to provide individualized arguments but necessarily involves some amount of subjective judgment by the examiner.

Officials at the Vermont service center described the approach as using a "target" with a series of concentric rings. Using the programmer/analyst example, the "bullseye" would contain the precisely related subject of computer science. The first ring would contain subjects that the examiners find are not precisely "in" the specialty occupation but which are, in their opinion, sufficiently related so that with a good general explanation from the petitioner there would generally be no further question. Electrical engineering, electronics engineering, and mathematics were placed in this category.

In the next ring were subjects which begin to raise questions as to whether they are "directly related" to the job, but where the petitioner could overcome objections with more particularized, concrete explanations of how the degree is related to the particular job duties and/or additional evidence of work experience or special training in the occupation. Civil engineering, mechanical engineering, chemistry, physics, and similar subjects were placed in this ring. The "outer" rings in this example contained progressively more "unrelated" degree subjects such as nontechnical liberal arts degrees, etc., whereby the petitioner would have a harder time overcoming a presumption that a degree is not a proper qualification. This type of analysis can be quite fluid; every case is considered on its own merits.

Frequently, the INS analysis of whether a degree field is sufficiently related to the subject of the job is based on comments in the Occupational Outlook Handbook (OOH) [discussed in a previous article] as to what degree subjects are normally accepted by employers as qualifying for the occupation.

When the INS examiner becomes concerned that a foreign national's degree is not sufficiently related to the specialty occupation to serve as an adequate qualification, the petitioner will be sent a Request for Evidence seeking extensive additional documentation of the foreign national's credentials. The Request may also raise a related issue, suggesting that, if in fact the foreign national is unqualified for the specialty occupation because of the "unrelated" degree and a lack of ether experience or training but is being offered the job anyway, the petitioner must have overstated the job duties which are not professional. In such a situation, the Request will ask the petitioner for evidence of the type described in previous articles on the topic of what is a specialty occupation, concerning the number of other workers in the position, their degrees, the employer's prior hiring practices, etc. That type of Request for Evidence is difficult, because it is questioning the petition both ways - on whether the job is a specialty occupation and on whether the beneficiary is qualified. Care must be taken to respond thoroughly to both points.

For these reasons it is good strategic advice for the petitioner to spot potential "unrelated degree" problems and address them in advance, even if it means extra effort for the initial filing. For example, in recent years the INS has quite commonly issued Requests for Evidence that question the relevance of the academic qualifications regarding petitions for programmer/analysts with degrees in mechanical or civil engineering. In India, for example, those degrees are quite common, and persons with those degrees often proceed from the university directly to work in computer programming. Often they obtain additional training in computer science from technical schools.

There are three approaches when the petitioner's initial assessment suggests a potential "unrelated degree" problem. In the first, the petitioner prepares arguments based on the foreign national's academic achievements, work experience, and training in detail to highlight details in the beneficiary's background that directly relate to the job. In the example of the software engineer with a mechanical engineering degree, the INS may dispute whether the academic major is "directly related" to software engineering. Perhaps upon review of the foreign national's transcript, the petitioner can point to a specific record of course work in computer science or programming that the foreign national completed as part of the degree, or a special project or thesis that involved, say, designing a computer-aided mechanical engineering software application. The foreign national may have also worked as a research assistant in a computer lab or performed other on-campus computer engineering outside the classroom. The petitioner can then argue that, notwithstanding the degree title, the overall academic program undertaken by the foreign national involved a combination of computer science and mechanical engineering sufficient to be "directly related" to the software engineering position offered. This argument should be backed up by proper evidence, including official copies of the academic transcript, copies of any thesis or special project, and reference letters from an advisor or computer science professor. The company letter should contain detailed descriptions about what specific software tools and programming languages were used.

The more attenuated the foreign national's academic background is, the more the petitioner should also have the foreign national submit reference letters verifying professional experience in the field, or other professional training evidence. The INS has indicated that where a foreign national has a degree in a scientific or engineering subject, it will consider the degree at least partially related to a computer position and accept the degree with evidence of an additional two to three years or more of professional experience or training in the field. It would treat the case as one involving combined education and experience, but apply the standards for that type of case in a flexible manner.

To avoid receiving an INS Request for Evidence, in any situation where the foreign national's degree appears to raise "unrelated degree" questions the foreign national should be instructed to gather employment reference letters. Based on recent INS actions, this would be particularly advisable, for example, in situations where foreign nationals with mechanical or civil engineering degrees are seeking computer-related positions.

The second approach is more focused on the nature of the job itself, and calls for preparing a more detailed job description showing that the position involves a combination of duties which "cross over" to the area of the foreign national's credentials. It is appropriate to use this approach where the job title generally implies work in one field, but the actual job duties require expertise in another. For example, a programmer/analyst may be assigned on a consulting basis to develop software for medical devices. The "unique-needs" nature of the assignment may require someone familiar with medical terminology or anatomy. Thus a degree in biology, for example, although clearly not related to computer programming, would nevertheless provide the foreign national with the requisite expertise to develop software for medical devices. Or suppose a management consulting company must advise a client on effective means of controlling pollution. A degree in environmental science would be useful, but would not be considered the appropriate educational background for a typical management consultant.

In a more common form of such an argument, a software engineer may be assigned to develop advanced mechanical engineering CAD/CAM software for use by design and mechanical engineers. A mechanical engineering degree should be accepted by INS as a normal, directly related qualification. Similarly, a computer programmer may be assigned to perform programming in electronics engineering applications for embedded software used to control advanced electronics devices. An electronics engineering degree will be a normal, directly related qualification. The petitioner must highlight those aspects of the job duties to which the foreign national's background most directly relates.

In addition to matching the foreign national's qualifications with the specific job duties, it may be helpful to refer to any other employees with similar degrees in similar positions. If the employer is involved in a niche market that requires specific expertise such as a software development company that-creates software to manage manufacturing devices, this would be helpful in demonstrating why that specific expertise would qualify the foreign national for the position even though the person is lacking what might be a more traditional degree for the general job category. The petitioner should instead focus on the job description and explain how the job involves special duties which, notwithstanding a generic title in one occupation such as software engineer or programmer/analyst, actually involves combined subject areas for which the foreign national's background is particularly relevant.

Finally, in some cases the best argument will not be enough. The foreign national may have a bachelor's degree but in a subject so unrelated to the job that the petitioner makes a judgment that an alternative strategy is needed. In such a case, the petitioner must determine how much of the foreign national's education is at least partially related to the job and then establish qualification based on combined experience and education using formulas and strategies that will be described in the next article.

Combining Education with Experience and Training to Meet the Required Qualification

A. Degree Equivalence: The Regulatory Scheme

From time to time a petitioner may wish to sponsor a foreign national for H-1B classification who does not hold a U.S. bachelor's degree or foreign equivalent, or holds such a degree but not in a subject related to the specialty occupation position. The H-1B program allows for a flexible approach in such a situation. A foreign national not holding a bachelor's degree may qualify for the specialty occupation by having a combination of "education, specialized training, and/or progressively responsible experience" that is "equivalent to completion of a United States baccalaureate or higher degree in the specialty occupation, and ... recognition of expertise in the specialty through progressively responsible positions directly related to the specialty."

Some common scenarios where this issue arises include the following:

The foreign national earned one of the three-year bachelor's degrees common in countries such as India or South Africa and then began work in the profession.

The foreign national has completed a foreign two-year diploma, certificate, or similarly titled program or a U.S. associate's degree, and then began work in the profession.

The foreign national completed some university courses but did not complete a degree program for personal reasons and then began work in the profession.

The foreign national has no formal education, but does have a long record of progressive experience in the specialty area which makes him or her attractive to the employer.

The foreign national has a bachelor's degree, but in an area sufficiently unrelated to the position so that it will not, standing alone, serve as an appropriate qualification.

"[E]quivalence to completion of a United States baccalaureate or higher degree shall mean achievement of a level of knowledge, competence, and practice in the specialty occupation that has been determined to be equal to that of an individual who has a baccalaureate or higher degree in the specialty and shall be determined by one or more of the following:

"(1) An evaluation from an official who has authority to grant college-level credit for training and/or experience in the specialty at an accredited college or university which has a program for granting such credit based on an individual's training and/or work experience;

"(2) The results of recognized college-level equivalency examinations or special credit programs, such as the College Level Examination Program (CLEP), or Program on Noncollegiate Sponsored Instruction (PONSI);

"(3) An evaluation of education by a reliable credentials evaluation service which specializes in evaluating foreign educational credentials;

"(4) Evidence of certification or registration from a nationally recognized professional association or society for the specialty that is known to grant certification or registration to persons in the occupational specialty who have achieved a certain level of competence in the specialty;

"(5) A determination by the Service that the equivalent of the degree required by the specialty occupation has been acquired through a combination of education, specialized training, and/or work experience in areas related to the specialty and that the [foreign national] has achieved recognition of expertise in the specialty occupation as a result of such training and experience. For purposes of determining equivalency to a -baccalaureate degree in the specialty, three years of specialized training and/or work experience must be demonstrated for each year of college-level training the [foreign national] lacks. For equivalence to an advanced (or Masters) degree, the [foreign national] must have a baccalaureate degree followed by at least five years of experience in the specialty. If required by a specialty, the [foreign national] must hold a Doctorate degree or its foreign equivalent. It must be clearly demonstrated that the [foreign national]'s training and/or work experience included the theoretical and practical application of specialized knowledge required by the specialty occupation; that the [foreign national]'s experience was gained while working with peers, supervisors, or subordinates who have a degree or its equivalent in the specialty occupation; and that the [foreign national] has recognition of expertise in the specialty evidenced by at least one type of documentation such as:

"(i) Recognition of expertise in the specialty occupation by at least two recognized authorities in the same specialty occupation;

"(ii) Membership in a recognized foreign or U.S. association or society in the specialty occupation;

"(iii) Published material by or about the foreign national in professional publications, trade journals, books, or major newspapers;

"(iv) Licensure or registration to practice the specialty occupation in a foreign country; or

"(v) Achievements which a recognized authority has determined to be significant contributions to the field of the specialty occupation."

B. Degree Equivalency "3 for 1 Rule" and Other Evidence

The first step when faced with an H-1B candidate who does not have the proper degree is to determine exactly how much academic experience the foreign national does have so that the balance of "missing" education can be calculated. The petitioner should get official course transcripts from the foreign national, and any diploma, certificate, or other award of any academic credentials. If the credentials come from a foreign country, they should be submitted for a foreign credentials evaluation report. That report will then specify the number of equivalent U.S. university-level years of education attained by the foreign national. In the case of three-year Indian B.S. degrees, for example, the report will state that the person has completed the equivalent of three years of study towards a bachelor's degree at an accredited institution in the U.S.

The evaluation report will inform the petitioner of the number of credits or years of study toward a regular four-year degree that the beneficiary lacks, and permits the petitioner to assess whether the beneficiary's remaining training and professional experience will "make up" for the missing education under the INS rules and, in combination with the completed education, qualify the person for the H-1B specialty occupation.

In practice, the regulatory scheme quoted above uses an approach known as the "3 for 1 rule." In this analysis, three years of "specialized training and/or work experience" may be used to compensate for each one year of college-level training the foreign national lacks. Relevant work experience must be professional experience in the specialty area. Among other requirements, it must be demonstrated that the training and/or work experience "included the theoretical and practical application of specialized knowledge required by the specialty occupation," and that "the foreign national's experience was gained while working with peers, supervisors, or subordinates who have a degree or its equivalent in the specialty occupation." Specialized training includes nonacademic classroom education related to the specialty occupation such as a program of technical coursework in computer software or business training commonly available from commercial providers or in a university extension program.

Thus, under this approach the holder of an Indian three-year B.S. degree, for example, may be able to qualify for H-1B classification with three years of progressive, postgraduate, professional experience or specialized training in the field. A candidate with two years of college-level education will need six years of such education or training, and so on.

With this formula, it is even possible to obtain H-1B classification for persons who have no college education. Realistically, though, a person with that background would need more than the minimum twelve years of experience or training than the "3 for 1 rule" would seem to dictate because of the difficulty of establishing that experience gained immediately out of secondary school was qualifying professional experience. Instead, a thorough assessment of the foreign national's career must be performed to determine when his or her work experience first rose to the level of specialized professional experience in the specialty field. The twelve years needed to equate to a four-year degree would then be counted from that time. In this scenario, any specialized professional or technical training that the foreign national might have received in a classroom setting, even if technically nonacademic, will be particularly relevant to indicate when his or her career path became sufficiently specialized.

The foreign national must obtain specific, primary-level documentation verifying all relevant work experience or specialized training. For work experience, the documentation must include detailed letters from prior employers. These letters should accomplish the following, at a minimum:

Identify the writer's position at the employer, and state how he or she knew the foreign national or became personally familiar with the foreign national's work;

Verify the exact dates of the employment, at least by month and year, and state whether it was full-time;

how the position specifically involved "theoretical and practical application of specialized knowledge," such as by identifying, in a computer programming job, the particular software languages, tools, or operating systems used,

the level of independent responsibility and decision-making authority,

the nature of any supervisory duties, with a description of the level of employees supervised,

the average qualifications and background of the foreign national's peers and supervisors, to show that they have professional qualifications, and

changes over time in the foreign national's duties, to show progressively more responsible duties.

This level of detail is necessary not only to show that the foreign national has the requisite number of years of experience, but that the experience was of a progressive nature within the specialty occupation. For example, the typical form of employment reference letter coming from an employer's human resources department which simply verifies that an foreign national was "employed as a Programmer/Analyst with X corporation from 1993 through 1996" may not be sufficient. There should be a detailed letter from a person knowledgeable about the foreign national's work in addition to or in place of such a letter.

Similarly, it is not sufficient merely to submit the foreign national's resume to verify the professional nature or dates of prior employment. A resume might contain a helpful chronological summary of the foreign national's employment history, but because it is prepared by the foreign national the INS will treat it at best as a self-serving form of secondary evidence. Instead, primary evidence in the form of detailed, independent employment reference letters is necessary.

Documentation to verify specialized training should consist of transcripts of technical training programs covering the dates of the training program, how many hours were involved, and what certificates if any were awarded at completion. If that form of documentation is not available, then letters verifying the training similar to employment verification letters should be obtained.

Finally, the regulations allow other types of evidence to be submitted as part of the effort to establish degree equivalency, including:

Certification or registration from a nationally recognized professional association or society in the profession that is known to grant such certification or recognition. The issuing organization should have an accrediting body or standards for issuing its certifications.

Membership in a recognized foreign or U.S. professional association or society in the specialty occupation.

Published material by or about the foreign national in professional publications, trade journals, books, or major newspapers.

Licensure or registration to practice the specialty occupation in a foreign country.

Achievements that a "recognized authority" has determined to constitute significant contributions to the field of the specialty occupation.

The petitioner should gather whatever documentation is available in these areas.

C. Independent Evaluation: Presenting the Evidence

Once the petitioner has gathered sufficient primary evidence to support an argument of degree equivalency under the INS standards, it has three choices for presentation of the case:

Obtain an evaluation from an official with authority to grant college-level credit for training and/or experience in the specialty from an accredited college or university;

Obtain evaluations offering recognition of expertise in the specialty occupation from at least two "recognized authorities" in the specialty occupation; or

Simply submit the evidence to INS with argument from the petitioner and ask the INS to make its own determination that the foreign national meets the degree equivalency standards.

The first option, an evaluation from a college or university official with authority to grant academic credit for the training/experience, represents by far the most persuasive manner to complete preparation of the case. It is the first and most prominent category of evidence recognized by the INS, and by its nature it will be the most credible form of opinion that a candidate's work experience is equivalent to completing the normal academic requirements necessary for a bachelor's degree at an accredited college or university.

In this context the "college or university official" will normally be a professor in the relevant specialty occupation subject who has the authority to review candidates for admission to the college or university and grant departmental academic credit for prior work experience. Many education evaluation services and immigration practitioners have arrangements with professors in various subject areas to provide these evaluations. The reviewing professor should be provided with all the evidence described above of the foreign national's pre-existing academic credentials, including the evaluation report, and the foreign national's work experience and specialized training. An appropriate evaluation must then:

Establish the reviewer's qualifications;

Describe the academic institution and department or program with which he or she is affiliated;

Describe the department or program's arrangement for granting academic credit for outside professional work experience or training, and state that the writer is authorized to evaluate candidates and grant such credit;

Mention the documents or other evidence reviewed (e.g., academic documents, education evaluations, experience letters, training certificates, etc.; some reviewers will also require a personal interview with the foreign national);

Summarize the foreign national's education and experience and how it relates to the specialty occupation; and

Conclude that the foreign national has achieved a level of knowledge, competence, and practice in the specialty occupation that is equal to that of an individual with a baccalaureate or higher degree in the specialty, with a strong description of the basis for this conclusion.

In writing the evaluation the professor need not offer a grant of academic credit from the institution, although the professor must be authorized to grant such credit upon proper application for admission to the school. It is common for these evaluations to contain a disclaimer stating that they do not constitute a guarantee from the institution of admission to the professor's academic department or program or actual grant of credit.

Most professors who prepare such evaluations will follow the INS "3 for 1" guideline and require three years of documented, progressive professional experience for each year of education equivalency. The regulations do not require that they must follow that rule, however. On a case-by-case basis it might be possible to obtain a professor's evaluation of bachelor's degree equivalency satisfactory to INS without a full "3 for 1" record of experience, depending on other accomplishments of the foreign national.

In the second approach, the petitioner obtains statements from two "recognized authorities" in the specialty occupation offering "recognition of expertise in the specialty occupation" for the foreign national. The regulations provide a special definition for "recognized authority" and standards for the recognized authority's opinion:

"Recognized authority means a person or an organization with expertise in a particular field, special skills or knowledge in that field, and the expertise to render the type of opinion requested. Such an opinion must state:

"(1) The writer's qualifications as an expert;

"(2) The writer's experience giving such opinions, citing specific instances where past opinions have been accepted as authoritative and by whom;

"(3) How the conclusions were reached; and

"(4) The basis for the conclusions supported by copies or citations of any research material used."

Although this definition provides some guidance, the credibility of a "recognized authority" is largely an issue of INS discretion. Appropriate evidence of an evaluator's credentials would include a resume and publication list, published material by or about the evaluator, and professional and academic honors. The "recognized authority" may be a college professor, official of a trade association in a field, or a highly accomplished individual in the profession.

Commercial credentials evaluation services and immigration attorneys frequently have regular arrangements with experts to prepare these types of opinions. The petitioner may also be able to identify a good source through industry contacts. In substance, the opinion should follow the format provided in the "recognized authority" definition above, and include detailed descriptions of the documents or other evidence reviewed along with the foreign national's education and experience related to the specialty occupation. It should expressly go through the "3 for 1" analysis and conclude that the foreign national deserves recognition for a level of expertise in the field normally associated with attainment of a bachelor's degree.

In this manner, a "recognized authority" evaluation can be quite similar to the "college or university official" evaluation. The differences between the two are simply that (1) a "recognized authority" opinion will be easier to get than a "college or university official" evaluation because the qualified pool of college or university officials with authority to grant academic credit for work experience or training in a particular field is smaller than the number of academic, industry, association, or other experts who may qualify as "recognized authorities," but (2) the petitioner needs a "recognized authority" opinion from "at least two" such individuals to meet the regulatory requirements, rather than only one.

The regulations do provide for a different, heightened form of "recognized authority" opinion where only one statement will be required, when such opinion can offer a determination that the foreign national has "achievements [that are] significant contributions to the field of the specialty occupation."

Finally, under its regulations the INS retains the discretion to make a determination of the foreign national's degree equivalency on its own. Accordingly, the petitioner may simply submit the case to the INS with the primary evidence it has collected, make appropriate arguments based on the "3 for 1 rule," and offer any other evidence of the foreign national's expertise, accomplishments, or recognition, and then ask the INS to make a favorable determination using its own discretion. As a practical matter, this approach should be followed only in strong cases where, for example, the foreign national has one of the three-year bachelor's degrees described above that is commonly accepted as a professional. qualification in the home country and then a strong record of well over five years of progressively responsible professional experience, and is now being offered a high-level position clearly representing further advancement.

In such strong cases, the INS has historically exhibited flexibility regarding the evidentiary requirements and has a record of approving cases without expert opinion. If this strategy works, it saves the petitioner the time and expense associated with expert opinions. If it does not, the petitioner faces greater time and expense later responding to a Request for Evidence. A decision to go forward without expert opinions should be based on a comprehensive assessment of the case made in consultation with a qualified immigration law practitioner.

Note in this regard that several foreign credentials evaluation firms offer a service in which one opinion is prepared by their regular academic credential evaluator that combines a discussion of the foreign national's academic credentials with a discussion of his or her work experience, and then applies the "3 for 1 rule" to conclude that the person has sufficient combined education and experience to constitute bachelor's degree equivalency. Petitioners should be wary of using these "opinions" because the firms' education evaluators are not qualified to offer them under INS criteria, being neither college nor university officials with authority to grant credit for experience, nor "recognized authorities" in any field other than evaluating foreign education credentials. If the position is that of a computer programmer/analyst, for example, the "recognized authority" opinion must come from a qualified expert in the field of computer science. The INS has expressly stated that evaluations of work experience made by foreign education credential services are not acceptable.

Evaluation firms will cite examples where INS has approved cases submitted with these statements, and the statements may be seen as useful secondary summaries of the petitioner's argument for recognition of a foreign national's degree equivalency when the petitioner intentionally chooses the "no expert" approach. However, the petitioner could just as easily include such argument in its own supporting letter, where it is likely to be more credible. When petitioners have relied on this form of statement, believing it to be primary evidence of a foreign national's degree equivalency, the INS has often asked for more evidence or denied the petition.

Special Requirements: Licensed Professionals and Physicians

A. Licensure

The regulations provide that holding a state license, registration, or certification authorizing a foreign national to practice a specialty occupation is another acceptable circumstance for H-1B qualification. This should be viewed as an evidentiary accommodation, however, not a waiver of the requirement for a four-year university degree. The job must still be in a qualifying specialty occupation that normally requires a baccalaureate degree for entry. If the foreign national holds a professional license but no college degree, the petitioner must still meet the degree equivalency standards. In such a situation, however, the license will be highly probative evidence. Thus, petitioners are always best advised to submit both the license and regular academic credential documentation or experience letters. Holding a U.S. state license in an occupation that is widely accepted as professional, however, such as civil engineering, would lessen or obviate the need to obtain an independent foreign credential evaluation report or expert evaluation of the foreign national's experience.

Indeed, the regulations provide that, if licensing is normally a requirement for the profession, the foreign national must have such a license prior to approval of the petition in addition to the requisite academic credentials. The H-1B petitioner should therefore always determine before filing whether a particular profession is one that normally requires a state license, such as law, public school teaching, or civil engineering. If so, evidence of the foreign national's licensure must be submitted to the INS.

If the foreign national does not have the requisite license, the petitioner must explain why a license is not required for its particular position. For example, in public school systems licensure is normally required for a teaching position, but often the requirement can be waived where a teaching candidate has special skills, such as foreign language proficiency, for which the system has an immediate need. Or in law firms it is common to hire foreign lawyers who lack a U.S. license to serve in legal positions entitled "foreign lawyer," "foreign law consultant," "law clerk," or something similar, which maintains the specialty occupation nature of the job but eliminates the requirement for a state license to practice law inherent in a regular attorney position.

B. The Licensing "Catch-22"

Frequently, a position offered to an H-1B beneficiary may require a license issued by the state where the job is located in order to work in the position. Veterinarian or public school Teacher are examples. However, the H-1B beneficiary, while otherwise qualified in academic or experience background, may not be able to get the license from the state because he or she is outside the country and cannot apply unless in the U.S. with legal authorization to work and a social security number. The person cannot enter the U.S. legal to work and obtain a social security number, though, without H-1B petition approval. But, the H-1B petition cannot be approved if the person does not qualify by holding the license.

What do you do in this conundrum?

There are two strategies. First, look closely at the employer's actual requirements and at regulations for practicing the occupation, to see if the license requirement can be waived, or if the person can begin work in the occupation on a provisional basis, perhaps under special supervision of person holding license, until the license is obtained. In the case of a public school teacher, for example, as described above a local school system often has the discretion to waive the license requirement for teachers with certain special skills. In this case, a statement or letter showing official evidence of the waiver should be included in the petition.

In another example, depending on a particular state's rules a Veterinarian with all the right academic or experience needed to qualify for a license may be able to practice provisionally under the direct supervision of a licensed Veterinarian for a limited period of time while applying for the license. Similarly, an attorney who has sat for the bar exam and awaits the results, or who may be licensed in a different state from where the job is located, may qualify to be hired by a law firm in an attorney position while the state's license is pending. Thus, in these situations, the license is not required to actually start in the job, even though it may ultimately be a required to stay in the job after some initial period. The petitioner should include detailed evidence, such as a statement from the licensing authority in the state, explaining these special circumstances. The petitioner should also be prepared for INS to approve the initial petition only for the provisional period, with a requirement that an extension be filed after the license is issued.

Where it is simply not possible to establish a waiver of the license requirement or the "provisional employment" circumstance, INS recently recognized the "Catch-22" nature of the problem and created a special allowance. In November 2001, a memorandum was issued spelling out a policy for H-1B petitions in professions where a state license is required but not held. Provided that the "only obstacle to obtaining state licensure is the fact that the alien cannot obtain a social security card from the SSA" or the "alien's lack of physical presence" in the U.S., then the petition can be approved for a one year period, at the end of which an extension petition will have to be filed showing that the license has been obtained. The petition should include evidence that "all other regulatory and statutory requirements for the occupation have been met," and evidence from the state licensing board that the only obstacle to issuance of the license is the lack of a social security card or physical presence.

C. Physicians

The H-1B regulations provide special criteria and documentary requirements applicable to petitions for foreign national physicians. These rules create additional, more stringent requirements for physician positions that involve direct patient care. Hospitals and medical practice groups are regular users of the H-1B program and must be aware of the rules, which are summarized as follows:

If the physician is coming to the U.S. primarily to teach or conduct research, with no patient care to be performed except that which is incidental to the teaching or research, then the petition simply must include evidence that the beneficiary has graduated from a U.S. or foreign medical school or has a full and unrestricted license to practice medicine in a foreign state. In such circumstances the evidentiary requirements are similar to the requirements for proving professional qualification in any other H-1B job category.

For a direct patient care position, however, the rules provide that, in addition to these criteria:

The foreign national must have a license or other authorization to practice medicine from the state where the position is located, or be exempt from such a requirement;

The foreign national must have passed the Federal Licensing Examination or an equivalent examination designated by the Secretary of Health and Human Services, or be a graduate of a U.S. medical school; and

The foreign national must have passed the English language proficiency test given by the Educational Commission for Foreign Medical Graduates (ECFMG), or be a graduate of a school of medicine accredited by a body or bodies approved for that purpose by the Secretary of Education.

However, a foreign national physician graduate of a foreign medical school who is "of national or international renown in the field of medicine" may be exempted from the Federal Licensing Examination and ECFMG requirements.

The regulations do not explain how to prove "national or international renown" for purposes of the exception in the last section. Based on a general interpretation of that term, petitioners would be advised to submit materials in any or all of the following categories of evidence:

reference letters from other medical professionals of national or international renown, stating that the foreign national has national or international renown for his or her abilities as a doctor or other contributions to the medical profession;

awards, particularly if they are national or international in scope, such as from the World Health Organization;

articles or presentations published by the foreign national in medical journals or presented at medical conferences;

media publicity or journal articles describing or making reference to the foreign national or his or her work;

evidence of the foreign national's working in prominent positions for renowned academic or medical institutions;

evidence of the foreign national's serving as a speaker or panelist at medical conferences;

evidence of the foreign national's acting as a peer reviewer of the work of others presented at conferences or published in journals; and

any other evidence of special contributions or abilities in the medical field.

This concludes discussion of the Beneficiary's required qualifications. The next several articles in this series will focus on the Labor Condition Application.

The Labor Condition Application

Background and Purpose of the LCA

As a prerequisite to being permitted to hire H-1B foreign personnel, the employer must obtain and submit to INS a certified Labor Condition Application ("LCA") relating to the job from the United States Department of Labor ("DOL"). Filling out and submitting the LCA to the DOL can be procedurally straightforward, but it creates several important and potentially complex legal obligations that the employer should understand.

Congress added the LCA requirement to the H-1B program in the Immigration Act of 1990 ("IMMACT 90"). The basic purpose of the LCA is to protect U.S. workers by guaranteeing that there will be no adverse effect on wages or working conditions caused by the employer's use of H-1B temporary workers. In the LCA the employer makes several attestations relating to pay, working conditions, and notice to U.S. workers that it is hiring foreign personnel. The thrust of these attestations is that the employer may hire H-1B workers only under at least the same pay scale and under the same working conditions for its U.S. workers, or equal to prevailing standards in the area of employment. This prevents the employer from having any incentive to hire foreign workers at lower pay, with fewer benefits, or under other less favorable conditions than a U.S. worker performing the same job. Certain employers make additional attestations relating to nondisplacement and recruitment of U.S. workers.

By requiring that the employer treat H-1B workers no differently than U.S. workers, the LCA process also protects foreign workers from exploitation in this country. Employers will not be able to impose substandard wages or working conditions in an occupation on foreign nationals which are below those of U.S. workers or relevant prevailing standards.

Human resources officials or others who are responsible for an employer's H-1B program must remember that in all matters of salary structure, benefits, advancement opportunities, and other working conditions the employer should use nondiscriminatory "status blind" policies for both H-1B and regular U.S. workers.

Payment of "Required Wage Rate": LCA Attestation #1

In the first LCA statement, the employer affirms that it will pay H-1B nonimmigrants in the specialty occupation the higher of the "actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question" or the "prevailing wage level for the occupational level for the occupational classification in the area of employment" for the period of authorized employment. This is known as the "required wage rate." [1] The required wage also includes an obligation to offer H-1B nonimmigrants benefits and eligibility for benefits provided as compensation for services on the same basis and in accordance with the same criteria as the employer offers to U.S. workers.

Determining the "Actual Wage"

Under the DOL regulations, "[t]he actual wage is the wage rate paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question." In determining the actual wage level, the employer may consider "experience, qualifications, education, job responsibility and function, specialized knowledge, and other legitimate business factors." "Legitimate business factors" are factors "that it is reasonable to conclude are necessary because they conform to recognized principles or can be demonstrated by accepted rules and standards." Where no other employees exist at the place of employment with substantially similar experience and qualifications in the employment, however, the "actual wage" shall simply be the wage paid to the H-1B nonimmigrant by the employer.

The actual wage obligation also requires the employer to provide regular salary reviews or increases to H-1B workers commensurate with the employer's pay system or scale, based on cost-of-living increases, change in market conditions, advancement in the occupation, or other factors. This is consistent with the overall purpose of the LCA to require the employer to treat H-1B workers no differently than U.S. workers in matters of pay and advancement. The required "actual wage" will probably change over time as the H-1B worker builds experience and seniority with the employer. As a result, the employer should review the salaries of H-1B workers at the same time as any annual salary review performed for other employees and make any adjustments necessary to maintain compliance with its "actual wage" attestation.

The employer is also required to retain documentation specifying the basis it used to establish the actual wage. The documentation must show how the wage set for the H-1B employee relates to the wages paid by the employer to all other individuals with similar experience and qualifications for the specific employment at the place of employment. Where adjustments are made in the employer's pay system or scale during the validity period of the LCA, the employer must retain documentation explaining the changes and clearly showing that, after such adjustments, the wages paid to the H-1B employee continue to be at least the greater of the adjusted actual wage or the prevailing wage for the occupation and area of intended employment.

Under this rule, the employer should ensure that it maintains a fair, objective policy for overall salary structure in the company, with provision for regular raises within set ranges based on levels of skills, experience, qualification, and overall comparative achievement. The employer should maintain a written salary structure policy and be prepared to demonstrate that it has at all times fairly and consistently maintained the foreign national's salary within the policy's guidelines.

Determining the "Prevailing Wage"

The "prevailing wage" for the occupation in the intended area of employment must be determined "as of the time of the filing of the [LCA]" based on the "best available information" at that time. Under DOL regulations, the prevailing wage is to be established from one of the following three general sources:

"(i) A wage determination for the occupation and area issued under the Davis-Bacon Act, or the McNamara-O'Hara Service Contract Act."

The Davis-Bacon Act and McNamara-O'Hara Service Contract Act ("SCA") govern wage rates paid to workers in certain specific occupations under contracts issued by the United States or the District of Columbia. These laws require that the DOL determine the prevailing wage for particular positions, and contractors on public projects must then pay at least that wage to workers in those positions. Under the LCA regulations, if an H-1B position is one for which the DOL has established a prevailing wage under the Davis-Bacon or Service Contract Act, then that will be the prevailing wage to which the employer is held for purposes of the LCA.

The Davis-Bacon Act applies by its terms to "laborers and mechanics" in contracts for construction, alteration or repair of public buildings or works, and thus it is unlikely to apply to any H-1B specialty occupation. The NcNamara-O'Hara Service Contract Act, however, applies more broadly to contracts whose "principal purpose ... is to furnish services in the U.S. through the use of service employees," which has given rise to a long list of "service" occupations for which DOL has published prevailing wages under the aegis of the SCA. The list includes several professional positions which arise frequently in H-1B cases such as computer programmer, computer systems analyst, librarian, and paralegal. For computer programmer and computer systems analyst positions, it is actually helpful to have SCA data for comparison because the data is presented in up to four levels, depending on experience. This contrasts with the problematic two-level system of the DOL's "OES" data, discussed below. Information about SCA wages, including the complete list of SCA occupations, is publicly available at http://ows.doleta.gov/foreign/wages.asp.

"(ii) A union contract which was negotiated at arms length between a union and the employer, which contains a wage rate applicable to the occupation."

If an H-1B position is unionized and a wage rate has been negotiated at arms length between the union and the employer, then that wage is presumptively established as the accepted prevailing wage. Generally it is infrequent for H-1B specialty occupation positions to be unionized, but it is common in certain settings. Engineering or technical positions in government agencies, utilities and large manufacturers, and attorney or paralegal positions in government and legal services organizations are examples where professional positions may be unionized and subject to collective bargaining. It will be helpful to the petitioning employer to have a prevailing wage set by collective bargaining in situations where such an "agreed" wage is lower than occupational sector-wide wage levels. This would be the case, for example, with attorney positions in government or legal services organizations.

"(iii) If the job opportunity is in an occupation that is not covered by either of the above provisions, the prevailing wage shall be the weighted average rate of wages, that is, the rate of wages to be determined, to the extent feasible, by adding the wages paid to workers similarly employed in the area of intended employment and dividing the total by the number of such workers. Since it is not always feasible to determine such an average rate of wages with exact precision, the wage set forth in the application shall be considered as meeting the prevailing wage standard if it is within 5 percent of the average rate of wages."

If the position is not expressly subject to the Davis-Bacon Act, the Service Contract Act, or a collective bargaining agreement, this provision sets the general guideline for determining the prevailing wage from other sources. For purposes of this guideline, "similarly employed" means "having substantially comparable jobs in the occupational classification in the area of intended employment." If there are no such workers employed by anyone other than the applicant employer in the area of intended employment, then "similarly employed" will mean:

"(A) Having jobs requiring a substantially similar level of skills within the. area of intended employment; or

"(B) If there are no substantially comparable jobs in the area of intended employment, having substantially comparable jobs with employers outside of the area of intended employment."

"Area of intended employment" means "the area within normal commuting distance of the place (address) where the H-1B nonimmigrant is or will be employed. If the place of employment is within a Metropolitan Statistical Area (MSA), any place within the MSA is deemed to be within normal commuting distance of the place of employment."

The DOL regulations then specify three sources where the employer may then obtain the prevailing wage data it uses for the LCA, which the DOL believes to be, "in order of priority, the most accurate and reliable." For a prevailing wage determined from one of these sources, the regulation provides that the employer need only offer 95% of the wage rate to be in compliance. The first of these sources, a "SESA Determination" is described in the following portion of this article, and the other two will be described in the next article.

The "SESA Determination"

First, the employer may apply to the "State Employment Security Agency" or "SESA" in its state, also known as the "State Workforce Agency" ("SWA"), for a "SESA Determination" of the prevailing wage. The procedure will vary from state to state, but generally this involves submitting a form to the SWA with at least the following information about the job:

Title,

Detailed description of duties,

Requirements for the position, including academic degree and any specific experience,

Geographic location,

Position's supervisor,

Whether the position has supervisory duties, and if so, the number and titles of personnel that are supervised by the position, and

Proposed salary, although with some SESAs the application may be submitted without the salary as a "blind" request for the prevailing wage to be determined.

The SESA will first determine if the position is one coming within the Davis-Bacon or Service Contract Act data sources, and if so use that data for its determination, as described above. Then no further analysis is needed. When one of these data sources applies the employer must offer 100% of the determined wage rate.

Where neither of those sources applies, the SESA will rely on the "Occupational Employment Statistics" prevailing wage survey program ("OES"), which includes publicly available data from the Bureau of Labor Statistics ("BLS"), a branch of DOL. Under its authority to administer the LCA program, the DOL has required SESAs to use the OES data source for most prevailing wage determinations since January l, 1998, pursuant to a detailed policy memorandum known as General Administration Letter ("G.A.L.") No. 2-98. Under the OES program, the BLS conducts extensive surveys of employers throughout the country to obtain data on wages being paid across a full spectrum of occupations.

Prevailing wage analysis under G.A.L. No. 2-98 begins with a determination of the appropriate occupational classification of a job under the Dictionary of Occupational Titles ("DOT"), and the relevant nine-digit "DOT" code. The SESA will make this determination based on the closest match between the employer's job title and description and the titles and description in the DOT. The DOT was described in more detail in the August 26, 2002 ILW.com article in this series, and is available on-line at http://www.oalj.dol.gov/libdot.htm.

Then, the DOT code is used to see if the equivalent occupational code exists in the SCA list, in which case the analysis need go no further. Where, as in most instances, there is not an SCA match, then the DOT code is "crosswalked" to a matching "Standard Occupational Code," or "SOC," which are the codes used by the OES prevailing wage database. The "crosswalk" is a function in which every DOT code is assigned to match a corresponding occupational code in a in a newer database of job categories used by BLS known as the O*NET. The actual code number for a job in the O*NET is known as the SOC. The DOT has approximately 12,700 occupational classifications, whereas the O*NET contains a more generalized group of approximately 900 titles. Consequently, there is a fair amount of consolidation in the crosswalk, where varying numbers of ostensibly related DOT titles will link to a more generic SOC classification. A further discussion of O*NET is contained in the August 26, 2002 ILW.com article in this series, and it is available on-line at http://online.onetcenter.org/.

Next, the appropriate match to an "area of intended employment" is determined. OES prevailing wage data assigns most locations to a Metropolitan Statistical Area (MSA) or a Primary Metropolitan Statistical Area (PMSA) in order to implement the regulatory requirement that the area encompass "normal commuting distance." MSAs usually are counties with populations of about 50,000 or more. PMSAs are generally larger, more populous (1 million +) metropolitan areas. Areas that do not come under an MSA or PMSA are characterized as "Balance of State" (BOS) areas. The OES attempts to keep BOS area designations at a size staying within "normal commuting distance." Because these are more sparsely populated areas with lower levels of economic activity, in many cases the BOS will not have sufficient survey response data to establish a prevailing wage in a particular occupation. Then the OES system will use data from a contiguous area, or if necessary, from statewide data.

The final variable to establish under G.A.L. No. 2-98 is the skill level of the job. The SESA will make this determination based on the employer's description of the job duties and the stated position requirements. There are only two levels used in the OES system, "beginning" (Level I) and "fully competent" (Level II).

Level I employees are defined as:

"Beginning level employees who have a basic understanding of the occupation through education or experience. They perform routine or moderately complex tasks that require limited exercise of judgment and provide experience and familiarization with the employer's methods, practices, and programs. They may assist staff performing tasks requiring skills equivalent to a Level II and may perform higher level work for training and developmental purposes. These employees work under close supervision and receive specific instructions on required tasks and results expected. Work is closely monitored and reviewed for accuracy."

Level II employees are defined as:

"Fully competent employees who have sufficient experience in the occupation to plan and conduct work requiring judgment and the independent evaluation, selection, modification and application of standard procedures and techniques. Such employees use advanced skills and diversified knowledge to solve unusual and complex problems. They may supervise or provide direction to staff performing tasks requiring skills equivalent to a Level I. These employees receive only technical guidance and their work is reviewed for application of sound judgment and effectiveness in meeting the establishment's procedures and expectations."

The primary consideration for the Level I/Level II analysis will be which of these definitions the employer's description fits most closely. Thus, the employer should pay careful attention in preparing the job description to the level of independent responsibility and judgment, level of supervision, and nature of skills required. Strategic drafting of the job description is necessary if the employer wishes to convey that a job is entry level, and obtain a Level I prevailing wage designation. The description should include terms such as "use basic understanding of . . . ," "perform range of moderately complex assignments in . . . ," "work under supervision of manager. . . ," etc. There is necessarily an element of judgment in an SESA decision between assigning Level I or Level II, and some SESAs are more flexible than others in applying the distinction.

The stated position requirements are also a major factor in the analysis. A Level I position generally must require no more than the usual minimum entry-level academic requirement in the occupation, usually a bachelor's degree. Depending on the circumstances and the view of the particular SESA, a requirement of one to two years of relevant experience in addition to the academic qualification may also be permissible. Requiring additional experience or an academic degree that is more advanced than the usual entry-level qualification will convert the position into Level II. Under G.A.L. No. 2-98, for example, if a bachelor's degree is the normal minimum requirement for entry into the occupation, any position stating an advanced degree requirement (Masters or Ph.D.) must be assigned to Level II.

However, in certain fields an advanced degree is normally required for entry into the occupation. In those cases a position stating that requirement may be assigned to Level I, provided there are no other requirements contained in the job offer or its components which require Level II skills. Librarian, market research analyst, management consultant, research scientist and attorney are examples of positions which may normally require an advanced degree as an entry-level qualification. Whether an advanced degree is acknowledged to be a usual entry level qualification in an occupation can be determined through the Occupational Outlook Handbook ("OOH"). The OOH was described in more detail in the August 26, 2002 ILW.com article in this series, and is available on-line at http://www.bls.gov/oco/home.htm.

Finally, on the basis of the "crosswalked" SOC occupational code, the area of employment designation, and the Level I/Level II assignment, the OES database will designate a prevailing wage based on the BLS employer surveys. The database lists most wages both as an hourly figure and as an annual salary. Under G.A.L. No. 2-98 the hourly figure is multiplied by 2080 (40 hours per week x 52 weeks) to determine annual salary for a regular fulltime position. For jobs which are not regular salaried 40 hour positions, the hourly figure may be used as the prevailing wage basis.

The SESA will then issue its determination report to the employer, which will be valid for the employer to use as the stated prevailing wage on an LCA filed with DOL for ninety days. For an LCA filed within that period, the SESA determination provides the employer with a "safe harbor" that establishes compliance with DOL prevailing wage rules for any H-1B worker employed in the job stated on the LCA and paid the stated wage. The DOL will accept the prevailing wage as correct and will not question its validity or investigate any complaint alleging inaccuracy of the SESA determination.

This all may sound like a very mysterious process, with a veritable alphabet soup of databases, code numbering systems, and government publications to understand. However, to its credit DOL has made the OES database available to the public in the "On-line Wage Library" ("OWL" - that's right, still another acronym to remember), found at http://edc.dws.state.ut.us/owl.asp. Very helpful background information on the prevailing wage calculation along with access to all of the "crosswalk" databases is found at http://ows.doleta.gov/foreign/wages.asp.

The OES system has been widely criticized by employers for two major perceived flaws. First, allocating wage data between only the two skill levels of "beginning" and "fully competent" fails to reflect the normal progression of skills advancement and pay increases in the professional workplace. The definitions encompass only entry-level, straight out of college positions and senior-level, fully independent, highly experienced employees. There are no mid-level professional descriptions for employees who have worked their way beyond the entry-level years but do not yet function on a completely independent senior level.

In practice, the OES Level I wages are generally perceived to be fair, where the experience and skill that level purports to reflect is discrete and easily defined. Level II wages, however, are perceived as unfair and inaccurate for many mid-level positions, where the level they purport to reflect combines data for everyone having more than a bachelor's degree plus approximately two years' experience, up to persons operating at the most senior levels in a profession who have advanced academic qualifications and ten, twenty, or more years of experience. The actual numbers bear this out: Level II wages reported by the system average 60% or more higher than Level I. It is not realistic to expect that within two to three years of starting in an occupation after college the average worker receives pay increases of 60%, yet the OES data suggests that the employer must indeed pay such amounts. Consequently, employers preparing an LCA for a mid-level position must generally rely on another source to establish the prevailing wage.

The Level I/Level II dichotomy has also been faulted for inconsistent practices in SWA or DOL offices around the country in assigning the Level designation based on job responsibility. In some regions, for example, a seemingly harsh policy had developed that any job which involved work at a client site automatically called for Level II designation, ostensibly because of the level of "independent" responsibility, even where the opportunity is open to persons just graduated from college and is very closely supervised by the employer. Recently, DOL released a Question and Answer formatted memorandum, entitled "Training and Employment Guidance Letter No. 5-02" which addresses some of these inconsistencies and controversial policies in assigning the Level I or Level II skill designations for the purposes of prevailing wage determinations. The memorandum clarifies, for instance, that not all management jobs are per se Level II, on the common sense basis that "there must be entry level managers for there to be experienced managers." Similarly, for a job that involves work at a client or customer site, Level II is "not necessarily" the correct designation, because it is "possible for employers to provide close supervision to employees even if the employees are working offsite."

The other criticism is that in the "crosswalk" between the 12,700 DOT job titles and the 900 SOC job titles, the OES system goes too far in aggregating multiple, at best marginally related or different-level DOT titles into "catch-all," generic categories. The reported wage data in certain titles must therefore be viewed as too general to be of use, and this problem is most obvious in several "remainder" OES categories.[2] In such cases the reported prevailing wage may be higher than realistic, or it may be lower.

The OES system has had the positive benefit that employers now can determine the DOL methodology both because it has been published in G.A.L. No. 2-98 and, more important, because employers may perform research in the OES database in advance in the system through the On-line Wage Library at http://edc.dws.state.ut.us/owl.asp to determine the likely prevailing wage before beginning the SESA process. In some cases, this will enable the employer to merely use OES data on the LCA and proceed comfortably without actually obtaining a SESA determination, as will be described further in the next article. In other cases, it will quickly alert employers to problems with the offered wage level so that another source of data can be located without losing precious time in the overall LCA and H-1B process.

In a more recent enhancement the OWL now contains SCA data as well as the OES database, so it can be quickly determined if a job is subject to the SCA list, and if so what is the wage under that source.

The OES system also recognizes a special set of wage data for certain types of nonprofit and government employers, where prevailing wages for certain types of positions are typically lower than those for similar positions in the private, for-profit sector. In response to criticism that these employers were unfairly penalized by DOL rules which subjected them to the same prevailing wage criteria as private employers, Congress added the following provision to the H-1B rules in the American Competitiveness and Workforce Improvement Act of 1998 (ACWIA):

"(1) In computing the prevailing wage level for an occupational classification in an area of employment for purposes of [the H1B program] in the case of an employee of -

"(A) an institution of higher education (as defined in section 101(a) of [the Higher Education Act of 1965]), or a related or affiliated nonprofit entity; or

"(B) a nonprofit research organization or a Governmental research organization,

"the prevailing wage level shall only take into account employees at such institutions and organizations in the area of employment."

Thus, when the applicant to SESA for a prevailing wage determination establishes that it is (1) an institution of higher education, (2) a nonprofit entity affiliated with an institution of higher education, (3) a nonprofit research organization, or (4) a governmental research organization, the SESA uses a special OES source known as the "EDC" database which contains only data collected from these types of institutions.[3] Use of the special data applies to all occupations with these types of employers, not just to research positions. The Level I/Level II distinction applies in the same manner as with other OES data.

Finally, G.A.L. No. 2-98 allows employers to furnish wage data themselves to the SESA and request that the SESA make the prevailing wage determination based on that data rather than the OES system." The wage data may be contained in a published wage survey or in a survey that has been conducted by or for the employer. G.A.L. No. 2-98 states that "[the use of such employer-provided wage data is an employer option." However, the employer must provide extensive information about the survey methodology to the SESA, satisfying a strict seven-point set of criteria. The SESA must then make a determination with regard to the adequacy of the data provided and its adherence to these criteria before accepting the data. The G.A.L. specifically warns that, "[i]nformation from employers that consists merely of speculation, subjective impressions, or pleas that it cannot afford to pay the prevailing wage rate determined by the SESA cannot be taken into consideration in making a wage determination."

In practice, SESA acceptance of employer-submitted surveys has been limited or, in some states, virtually nonexistent. In other states a few well-known published surveys have been accepted, but only after extensive persuasion of the SESA and corresponding DOL Regional Office of the survey's compliance with the seven points. Consequently, this means of obtaining prevailing wage determination has been limited.

Most recently, however, the DOL issued a policy memorandum entitled "Prevailing Wage Policy Q's and A's" as part of G.A.L. No.1-00, which provides extensive explanation of the criteria for acceptance of an employer-provided survey and appears to offer a more "user-friendly" tone than G.A.L. No. 2-98. It answers recurring questions that have arisen since release of the earlier memorandum, with a more flexible approach than heretofore. It appears to instruct SESAs to be more open in considering employer-provided surveys."

Briefly, the seven criteria for acceptance of an employer's offered survey are as follows:

The data must have been collected within twenty-four months.

If it is a published survey, it must have been published within twenty-four months.

The survey must include industries that employ workers in the occupation.

The wage determination must be based on an arithmetic mean.

The survey must identify a statistically valid methodology that was used to collect the data.

Extensive discussion of these points is found in the two G.A.L. memoranda.

When the SESA does accept an employer-submitted survey and issue a prevailing wage determination on that basis, the determination is acceptable only that one time for the employer that submits the survey and for the single submitted job. If another employer wishes to use the survey, or the same employer wishes to use it again for another position, it must be resubmitted in a new application.

More on Determining the "Prevailing Wage"

A. The "Independent Authoritative Source"

In lieu of obtaining a SESA prevailing wage determination, the employer may use an "independent authoritative wage source" to establish, on its own, the prevailing wage for the position which it reports on the LCA. An "independent authoritative wage source" means "a professional, business, trade, educational or governmental association, organization, or other similar entity, not owned or controlled by the employer, which has recognized expertise in an occupational field." The DOL regulations state that:

"[A] prevailing wage survey for the occupation in the area of intended employment published by an independent authoritative source shall mean a survey of wages published in a book, newspaper, periodical, loose-leaf service, newsletter, or other similar medium, within the 24-month period immediately preceding the filing of the employer's application. Such survey shall:

"(1) Reflect the average wage paid to workers similarly employed in the area of intended employment;

"(2) Be based upon recently collected data-e.g., within the 24 month period immediately preceding the date of publication of the survey; and

"(3) Represent the latest published prevailing wage finding by the independent authoritative source for the occupation in the area of intended employment.. . ."

These criteria are similar to, but perhaps not quite as stringent as, the seven criteria for SESA acceptance of a private survey published in G.A.L. 2-98 and G.A.L. 1-00.

In practice, a majority of employers do not go through the SESA determination process, and use the "independent authoritative source" approach instead. The SESA process can be exceedingly time-consuming, and lead to complicated discussions with the SESA if it makes a determination the employer wishes to dispute, causing further delay. Using "independent authoritative source" data avoids those problems, and may in fact provide the best reasonable source when the OES data appear to be unfair or unrealistic, as in the case of the mid-level employees described above. However, going forward without a SESA determination deprives the employer of a "safe harbor" from government questioning later due to the failure of the relevant agency to review and specifically approve a prevailing wage for the position.

The "independent authoritative source" approach requires an employer to be very careful in drafting an appropriate job description which (1) accurately reflects the level of skill and experience required for the position and (2) relies only on independent data which it has determined upon good-faith review to comport with the criteria above for the position. The employer must be confident that its choice of data is correct, and be prepared to demonstrate that fact in the event of an audit by DOL. In deciding which approach to take, the employer should carefully weigh the respective risks and benefits.

Three strategies have become common for employers in the "independent authoritative source" approach. First, the employer may furnish the same information it would submit to the SESA for a prevailing wage determination to a private consultant or expert firm that specializes in wage and salary compensation surveys or analysis. Typically, such firms maintain extensive libraries of published wage surveys, and may create and publish such surveys themselves. For a fee they will review the employer's job description, conduct research to find an appropriate match in a published survey, and issue a report to the employer. The report will state the prevailing wage the firm has determined for the job and the basis for the finding, and identify and describe the published survey relied upon. This may be the "safest" of the "independent authoritative source" strategies, because if there is any question later over the stated wage, the employer may establish that it ordered an independent review from the outside firm, and call on the firm to defend the basis for its finding.

Second, the employer may subscribe to or have other access to published wage surveys on its own, and wish to make the determination itself as to an appropriate wage to cite. This avoids the time necessary for the SESA determination and the expense of an expert report. The employer should only proceed on this basis if it is confident in the good-faith correctness of the data choice it has made, and is prepared to defend the choice in any inquiry by DOL.

Third, the employer may conduct a search in the DOL's Online Wage Library ("OWL") and rely on the appropriate OES or SCA wage reported there as an "independent authoritative source" for the prevailing wage it enters on the LCA. This is most useful where the offered salary exceeds the reported Level II wage in the OES database or highest reported SCA wage. As long as the choice of occupational code is correct, it is unlikely DOL would question whether the prevailing wage is met where the employer expressly submits to the highest wage DOL reports for the occupation in its own system. This approach is also appropriate for truly entry-level, closely supervised positions that the employer in good faith believes meet the DOL's Level I criteria." As described in the previous article, the On-line Wage Library is available at http://edc.dws.state.ut.us/owl.asp.

On-line OES data should not be used for positions that do not meet the Level II wage but lie in a middle range of responsibility, skill, and experience requirements, or positions below the Level II wage for which the employer states an advanced degree requirement (except for the positions normally requiring an advanced degree at entry level, as discussed before). For the reasons discussed above, the OES is inappropriate for such positions, and the employer should use another source. If the employer enters Level I data on an LCA for such a position, it will be questioned later for using a prevailing wage for the position that was inappropriately low.

B. Using "Another Legitimate Source of Wage Information"

Finally, the employer may rely on "other legitimate sources of wage data to obtain the prevailing wage." An "other legitimate source survey" must be one which:

"(1) Reflects the weighted average wage paid to workers similarly employed in the area of intended employment;

"(2) Is based on the most recent and accurate information available; and

"(3) Is reasonable and consistent with recognized standards and principles in producing a prevailing wage."

The main distinction between this and the "independent authoritative source survey" is that an "other legitimate source survey" allows the employer to use a nonpublished, private survey which may be conducted by the employer itself or by a survey firm acting on its behalf. The survey must still use established, objective criteria for a legitimate, statistically sound survey.

In practice, it will be time-consuming, expensive, and complicated for the employer to procure a survey of this type on its own. Further, such a survey will be subject to the highest potential level of scrutiny from DOL. The regulations specifically warn that "[t]he employer will be required to demonstrate the legitimacy of the wage in the event of an investigation." For a fee, survey firms-often the same firms that provide expert "independent authoritative source" reports will conduct private surveys for this purpose under contract to an employer. Still, employers are advised to conduct thorough research and determine that all possibilities for use of a published "independent authoritative source" survey have been exhausted before resorting to this option.

If the employer elects to invest in a private survey with an outside firm, it may then wish to submit the survey to the SESA and seek to have it accepted under the criteria of G.A.L. 2-100. If the survey is accepted the employer will then have the "safe harbor" protection of a SESA determination.

C. Required Documentation

Finally, the employer must evidence its compliance with the "required wage" obligation of the LCA by documenting how it established both the "actual wage," i.e., how the wage set for the H-1B nonimmigrant relates to the wages of other employees with similar experience and qualifications for the specific employment in that location, and the "prevailing wage." It must update the actual wage documentation at the time of any wage adjustments. For the prevailing wage, it must retain the SESA determination or union contract, "independent authoritative source" or "other legitimate source" survey, and any underlying supporting documentation." Finally, the employer must keep and make available to the DOL payroll and benefits records of all employees in the job in question at the location in the event of an actual inquiry.

The Next Three LCA Attestations

A. "No Adverse Effect on Working Conditions": LCA Attestation #2

In the second Labor Condition Application statement, the employer must affirm that "the employment of H-1B nonimmigrants will not adversely affect the working conditions of workers similarly employed in the area of intended employment."

"Working conditions" under the DOL regulations encompass matters such as "hours, shifts, vacation periods, and benefits such as seniority based preferences for training programs and work schedules." A statutory provision added by ACWIA expands and clarifies that the employer must affirmatively

"offer to an H-1B nonimmigrant, during the nonimmigrant's period of authorized employment, benefits and eligibility for benefits (including the opportunity to participate in health, life, disability, and other insurance plans; the opportunity to participate in retirement and savings plans; and cash bonuses and noncash compensation, such as stock options (whether or not based on performance)) on the same basis, and in accordance with the same criteria, as the employer offers to United States workers."

If there is an investigation or enforcement action by the DOL, the employer will be required to produce documentation establishing that it afforded its H-1B nonimmigrant employees working conditions on the same basis and in accordance with the same criteria as it affords its U.S. workers who are similarly employed."

B. "No Strike or Lockout": LCA Attestation #3

In the third required LCA statement, the employer must affirm that, as of the date of the application, there does not exist any "strike, lockout, or work stoppage in the course of a labor dispute in the occupational classification in the area of intended employment." The regulations explain that "labor disputes for the purpose of this section relate only to those disputes involving employees of the employer working at the place of employment in the occupational classification named in the labor condition application."

There are obligations under this statement which continue during the period of the LCA. First, if a strike or lockout of workers in the same occupation occurs at the place of employment at any time during the validity of the LCA, the employer must provide notice to DOL within three days. It is then barred from using the LCA in support of any H-1B petition filings in the occupational classification at the place of employment "until [DOL] determines that the strike or lockout has ended." In addition, the employer

"may not place, assign, lease, or otherwise contract out an H-1B nonimmigrant, during the entire period of the labor condition application's validity, to any place of employment where there is a strike or lockout in the course of a labor dispute in the same occupational classification as the H-1B nonimmigrant."[4]

Although all employers should be aware of the obligations they face under this provision in the event of a labor dispute, it is of particular concern to employers with unionized professional or technical employees.

There is no requirement for the employer to develop or maintain any special documentation to substantiate the "no strike or lockout" statement. If there is an investigation, however, the employer will have the burden of proof to show that there was no strike or lockout in the course of a labor dispute in the occupation, either at the time the application was filed or during the validity period of the LCA.

C. Notice to Employees of Filing: LCA Attestation #4

In the final Labor Condition Application statement, the employer must affirm that it has provided notice of the filing of the LCA "to the bargaining representative of the employer's employees in the occupational classification" and area of intended employment or, if there is no such bargaining representative, that it has "provided notice of filing in conspicuous locations at the employer's establishment(s) in the area of intended employment." The purpose of this rule is to provide notice to employees that the employer seeks to hire H-1B workers at particular wages and advise them of their right to initiate a complaint with DOL if they feel that hiring of H-1B workers will adversely affect them or that the employer is otherwise not acting in good faith compliance with the LCA obligations. Such notice is not intended to recruit or assess the availability of U.S. workers for the H-lB positions.

The notice to a bargaining representative or to employees through posting must be provided on or within thirty days prior to filing the LCA and must state:

that the employer is filing a labor condition application for H-1B workers,

the number of H-1B nonimmigrants the employer is seeking,

the relevant occupational classification,

the wages offered,

the period of employment,

the location or locations at which the H-1B nonimmigrants will be employed,

that "[c]omplaints alleging misrepresentation of material facts in the labor condition application and/or failure to comply with the terms of the labor condition application may be filed with any office of the Wage and Hour Division of the United States Department of Labor,"

for "H-1B Dependent" and "willful violator" employers in an LCA that is not solely for exempt H-1B nonimmigrants, that the employer agrees to the nondisplacement and recruitment obligations, and that complaints alleging failure in this regard may be addressed to the Department of Justice at a particular address in Washington, D.C.,[5] and

that the actual labor condition application is "available for public inspection at the employer's principal place of business in the U.S., or at the worksite" (if the notice is not in the form of posting an actual copy of the LCA)."

Most employers will not have a collective bargaining representative in the occupation for which H-1B workers are being hired, and thus provide direct notice to workers. The employer may use one of two methods: "hard copy" notice or "electronic" notice. A hard copy notice consists of a physical posting in "two or more conspicuous places ... so that workers in the occupational classification at the place(s) of employment can easily see and read" it. The regulations suggest that appropriate locations would include places where the employer posts other required notices such as wage and hour or occupational safety and health information. The notices must remain posted and visible for a total of ten days. The actual posting may be a copy of the LCA itself, because it contains information sufficient to comply with the notice requirements, or a document the employer creates listing the information above."[6] Similarly, an "electronic notice" may be in a form prepared by the employer containing the information outlined above, or it may simply incorporate a copy of the LCA. An electronic notice may be provided by

"any means [the employer] ordinarily uses to communicate with its workers about job vacancies or promotion opportunities, including through its `home page' or `electronic bulletin board' to employees who have, as a practical matter, direct access to these resources; or through e-mail or an actively circulated electronic message such as the employer's newsletter."

The electronic notice must be available for ten days unless employees are provided individual, direct notice such as by e-mail, in which case it may be provided only once. The notice must be provided to all employees in the occupational classification for which H-1B non-immigrants are sought, at each place of employment where they will be employed.

The notice obligation continues and extends to new worksites within the area of employment listed on the LCA at which the employer may wish to place H-1B nonimmigrants after the LCA has become effective. If an employer places an H-1B nonimmigrant at a worksite that was not contemplated at the time it filed the application, it is required to provide the electronic or hard copy notice at the worksite in the manner described above on or before the date any H-1B nonimmigrant begins work at the new site.

Employers who provide consulting or staffing services or otherwise have occasion to assign an employee to work at a third party's location should be aware that the notice requirement extends to such worksites, typically those of a client, customer, or strategic partner. Hard copy notice, for example, must be posted at each place of employment where any H-1B nonimmigrant will be employed "whether such place of employment is owned or operated by the employer or by some other person or entity." If electronic notice is used it must be provided "to employees in the occupational classification . . . including both employees of the H-1B employer and employees of another person or entity which owns or operates the place of employment. This requirement applies when the employer seeks to place an H-1B worker at a third-party location within the area of employment under an existing LCA, or when the employer places an H-IB employee at a third-party location not covered by an existing LCA for more than the allowed "short term placement" [to be discussed in a later article], and must therefore file a new LCA.

Employers required to arrange notice of the LCA at third party worksites should engage in strategic planning and work with their clients to determine the best manner of complying with the notice obligation to fit their respective business practices and needs and the factual circumstances of the placement. In some cases the preferred method may be a hard copy posting, and in others it may be a form of intranet or other electronic posting that reaches workers at the site. Because electronic notice may be more narrowly directed at only workers "in the occupational classification" at the worksite, in some circumstances the best strategy may be to compile such a targeted list and provide them with direct notification via e-mail, avoiding a generalized, site-wide posting. In any case, employers who anticipate placing workers at third party sites should secure cooperation of their clients in this process, through, for example, including language to require such cooperation in the standard service contract.

The notice of filing of the LCA must be provided within 30 days before the date the LCA is filed with the DOL. The employer may file the LCA as soon as the posting period has commenced rather than waiting ten days for it to conclude.

In a related requirement, the employer must provide a copy of the labor condition application certified by the DOL to the H-1B worker no later than the date on which he or she reports to work.

The employer must retain documentation of its compliance with the notice obligation, such as copies of the dated notice to the collective bargaining representative, or copies of the hard copy or electronic notice with clear notations of the dates when, and locations where, or method by which the notice was posted.

"Non-Displacement" and Recruitment of U.S. Workers: Additional LCA Attestations for "H-1B Dependent" and "Willful Violator" Employers

Certain employers must make additional attestations relating to "non-displacement" and recruitment of U.S. workers. Employers subject to these requirements are those deemed "H-1B dependent" or found to be "willful violators" during a prior DOL or INS enforcement proceeding. The employer is exempt from these additional attestations, however, if the LCA only supports petitions for H-1B nonimmigrants earning annual salaries of $60,000 or more or holding master's degrees or equivalent qualifications.

A. What Employers Are Subject to the Additional Attestations

ACWIA introduced the concept of "H-1B dependent" status to distinguish those employers with workforces that comprise significant numbers of HIB nonimmigrants, so that those employers would be subject to tougher requirements. H-1B dependence occurs when:

an employer with twenty-five or fewer full-time equivalent employees in the U.S. employs more than seven H-1B nonimmigrants,

an employer with at least twenty-six, but not more than fifty, full-time equivalent employees in the U.S. employs more than twelve H-1B nonimmigrants, and

an employer with fifty-one or more full-time equivalent employees in the U.S. employs a number of H-1B non-immigrants that is at least 15% of the number of such full-time equivalent employees.

The number of "full-time equivalent" employees within a workforce is determined by adding the number of actual full-time employees with a number derived from aggregating the number of part-time employees into a full-time equivalent number. Thus, the calculation is not specific to a particular occupation within the employer's workforce, but is based on the total number of full-time equivalent employees and total number of H-1B nonimmigrant employees, regardless of their positions.

The H-1B dependency calculation may be made in one of two ways: the employer may (1) add the actual hours of part-time employees and divide by its normal full-time hours (i.e., 35 or 40), or (2) count each part-time employee as one-half of a full-time equivalent.

A group of entities treated as a "single employer" under the Internal Revenue Code ("IRC") also is a single employer for purposes of determining H-1B dependency. In this case, the calculation above is based on the total number of full-time equivalent and H-1B employees in the entire group. "Single employer" groups under the IRC include (1) a "controlled group of corporations," such as a "parent-subsidiary controlled group," a "brother-sister controlled group," or a "combined group," (2) "a group of trades or businesses, whether or not incorporated, that are under common control," or (3) an "affiliated service group."

"Willful violator" employers are those against whom a finding of violation. has been entered on or after October 21, 1998 (the date of enactment of ACWIA) by the DOL or INS in an enforcement proceeding related to the H-1B program. In determining such a violation the agency must have found that the employer committed either a willful failure or a misrepresentation of a material fact during the five-year period preceding the filing of the LCA.

B. The "Non-Displacement of U.S. Workers" Attestations

H-1B dependent employers are prohibited from "displacing" U.S. workers within ninety days before and after the filing of an H-1B petition supported by the LCA. Displacement is prohibited regardless of whether it occurs "directly" within its own workforce, or "secondarily" at the worksite of a second employer. As a result, there are two attestations relating to nondisplacement on the LCA:

"Displacement: The employer will not displace any similarly employed U.S. worker within the period beginning 90 days before and ending 90 days after the date of filing a petition for an H-1B nonimmigrant supported by the application.

"Secondary Displacement: The employer will not place any H-1B nonimmigrant employed pursuant to this application with any other employer or at another employer's worksite UNLESS the employer applicant first makes a bona fide inquiry as to whether the employer has displaced or intends to displace a similarly employed U.S. worker within the period beginning 90 days before and ending 90 days after the placement, and the employer applicant has no contrary knowledge."

"Displacement" refers to the "lay off' of a U.S. worker from an "essentially equivalent job" as that held by, or offered to, the H-1B nonimmigrant.

A "lay off" occurs where the employer has caused the loss of the U.S. worker's employment in circumstances other than (1) the discharge for inadequate performance or other cause, (2) a voluntarily departure or retirement of the U.S. worker, (3) where a temporary grant or contract expires, or (4) where the U.S. worker is given a bona fide offer of similar employment at equivalent or higher compensation.

An "essentially equivalent job" involves "essentially the same duties and responsibilities" as the job from which the U.S. worker was laid off, provided that it is located in the same area of employment. The qualifications of the laid-off U.S. worker must also be "substantially equivalent" to the qualifications of the H-1B nonimmigrant. United States workers satisfying these criteria are considered "similarly employed."

The "direct displacement" prohibition is straightforward. The employer may not lay off a U.S. worker from a job that is essentially the equivalent of the job for which the H-1B nonimmigrant is sought within ninety days before or after the filing of any H-1B petition supported by the LCA making the attestation.

In the "secondary displacement" prohibition, the employer may not place an H-1B nonimmigrant with another-- or "secondary" -- employer, at the other employer's worksite, where there exist certain "indicia of an employment relationship" between the other employer and the nonimmigrant, until the H-1B employer has asked the other employer whether within ninety days before and after the placement the other employer has displaced or intends to displace a U.S. worker employed by the other employer, in an essentially equivalent job. The H-1B employer needs to attest that it has made such inquiry and that based on the inquiry it has no knowledge of any such displacement by the secondary employer.

"Indicia of employment" with the secondary employer includes factors such as that the employer (1) has a right to control when, where, and how the H-1B nonimmigrant performs the job, including setting hours and duration of the job, (2) furnishes tools, materials, or equipment to the person, (3) maintains a continuing relationship with the worker, and (4) has a right to provide additional assignments or to discharge the person.

The H-1B employer must use "due diligence" in making and documenting the necessary "secondary displacement" inquiries. DOL regulations suggest that appropriate methods include (1) securing and retaining a written assurance from the other employer that it has not and does not intend to effect such a displacement, (2) preparing and retaining a written memorandum documenting, in detail, the contemporaneous receipt of oral statements from the other employer with such assurances, or (3) including a "secondary displacement clause" in any contract between the H-1B employer and the secondary employer, in which the other employer expressly agrees to a non-displacement obligation. Other more particularized inquiry may be required for due diligence depending on the circumstances.

Regardless of the response the secondary employer provides to the inquiries, if it in fact displaces a U.S. worker during the applicable period, then the H-1B employer will be subject to a finding that it violated the LCA requirements, even if the H-1B employer had no knowledge of the secondary employer's displacement and may have otherwise acted in full compliance with its obligations.

C. The "Recruitment of U.S. Workers" Attestation

An employer subject to this obligation must attest on the LCA form as follows:

"Recruitment and Hiring: Prior to filing any petition for an H1B nonimmigrant pursuant to this application, the employer took or will take good faith steps meeting industry-wide standards to recruit U.S. workers for the job for which the non-immigrant is sought, offering compensation at least as great as required to be offered to the H-1B nonimmigrant. The employer will (has) offered) the job to any U.S. worker who (has) applied and is equally or better qualified than the H-1B nonimmigrant."

Under "industry-wide standards for recruitment" the employer need not use any particular methods or frequency of recruitment activities, and may make its own determination of the appropriate activities through industry sources. The recruitment should, however, "be at a level and through methods and media which are normal, common or prevailing in the industry, including those strategies that have been shown to be successfully used by employers in the industry to recruit U.S. workers." There must be both internal and external recruitment, and some "active" recruitment.

The employer may use "legitimate selection criteria relevant to the job that are normal or customary to the type of job" in screening applicants, provided that the criteria are not applied in a discriminatory manner. The recruitment must be conducted in good faith, and in a manner that does not favor H-1B nonimmigrant applicants. The employer must offer the job to any U.S. worker who applies and is equally or better qualified for the job than the H-1B nonimmigrant.

D. Exemption from the Non-Displacement and Recruitment Attestations

The nondisplacement and recruitment attestations are not required if the LCA is solely for employment of "exempt" H-1B nonimmigrants. An H-1B nonimmigrant is "exempt" if he or she receives annual wages equivalent to $60,000 or more, or has attained a master's degree or higher (or its equivalent) "in a specialty related to the intended employment."

In the "exempt" salary calculation, cash bonuses and similar compensation payments may be included, but only if they are guaranteed. Non-cash benefits such as insurance may not be included.

Clearly, if a foreign national holds a master's degree or higher from a U.S. institution, the foreign national is exempt. Academic degrees from foreign institutions that are accredited or recognized under the laws of the country where the degree was issued must be evaluated to determine that they are the equivalent of U.S. masters' degrees or higher as issued by a U.S. academic institution.[7] Experience and expertise are not equivalent of U.S. masters' degrees for exemptions. Further, the foreign degree must be "in a specialty which is generally accepted in the industry or occupation as an appropriate or necessary credential or skill for the person who undertakes the employment in question.[8]

To claim the exemption, the employer must designate on the LCA that the LCA will be used only to support H-1B petitions for exempt H-1B nonimmigrants. The INS will then determine the worker's exempt status as part of its adjudication of the petition, based on the salary stated and/or evidence of educational credentials.

ACWIA provided a separate exemption from the recruitment attestation for LCAs filed in support of H-1B nonimmigrants who are priority workers, who are defined as persons with extraordinary ability, outstanding professors or researchers, or multinational executives or managers. Usually, persons of extraordinary ability and outstanding professors or researchers will have masters' degrees or higher. Thus, this exemption is of limited use, since most eligible H-1B nonimmigrants qualify for the broader exemption from both the recruitment and non-displacement attestations described above. Further, multinational executives and managers are usually eligible for L-lA status and thus need not be beneficiaries of H-1B petitions.

Completing and Filing the LCA

The LCA requires several categories of information in addition to the employer's attestations. The employer should be aware of two strategies in preparing this information which can permit the use of the LCA in connection with later H-1B petitions, or avoid problems in the event business needs require changes in employment of H-1B persons covered by the LCA. These strategies include the "multiple position" and "multiple location" strategies.

[a]-Occupation Code and Job Title

First, the application must specify a three-digit occupational code derived from the DOT classification and the employer's own job title. The job title should reflect, in a straightforward manner, the occupational category and professional nature of the position. The employer should anticipate any changes that may occur in specific duties or projects over the period of the LCA and designate a title which encompasses flexibility so long as the position remains within the general occupational classification.

[b]-Full-Time or Part-Time

Next the employer must indicate whether position openings included in the LCA will be full-time or part-time. The regulations provide that the position or positions covered by the LCA may be full-time or part-time, but that full-time and part-time positions may not be combined on a single LCA. If the employer checks "part-time" in the box next to the job title and then enters the wage in hourly terms, it will retain flexibility to employ H-1B workers under the LCA with varying numbers of hours, within the range specified on the Form I-129 petition filed with the INS.

[c]-Number of Openings and "Multiple Position" Strategy

Third, the employer enters the number of H-1B nonimmigrant workers sought in the application. An LCA can cover any number of positions in an occupational classification that an employer realistically thinks it may wish to offer to H-1B professionals. Once the LCA is certified, it can then be used to support repeated H-1B petitions filed at any time during its validity until all the "slots" designated on the LCA have been exhausted. The primary advantage of this approach is that having the LCA in hand can expedite filing of subsequent INS petitions. If the employer is certain that it only wishes to use the LCA for one H-1B petition, then it should only enter the number "l." If not, it should enter a number that it anticipates will cover upcoming hiring needs. In the past many employers have used this "multiple positions" LCA strategy, and file LCAs designed to cover six months to one year of projected hiring, with up to fifty or more positions specified as the potential number of H-1B nonimmigrants, although due to changing hiring patterns in the current economy and a new system of filing the LCA which provide for rapid response from DOL this is less common.
There is no penalty for specifying more "slots" than the employer ultimately uses, but the number of positions listed should represent the employer's bona fide business need and the employer should have the ability to pay the wages stated.

[d]-Rate of Pay and Prevailing Wage

Next, the employer specifies the rate of pay offered in the position, which may be expressed on an "hourly, weekly, biweekly, monthly or annual basis. If the employer will be using the LCA for part-time positions or positions with varying numbers of hours per week, it should express the pay in hourly terms. Otherwise, any increment is acceptable, although most employers will state an annualized salary. The employer also may express the pay in a range rather than a fixed amount. When using a range, the stated low end must meet the prevailing wage for the occupation. The high end of the range should realistically stay within the level of the position in the employer's pay system. The amount actually offered to the foreign national may be anywhere in the range.

The employer must then specify the prevailing wage and its source. If the employer has an SESA determination it must check a box to so indicate. Otherwise it must identify with specificity the "independent authoritative source" or "other legitimate source" data it has used. This could mean entering the name of a published survey. Users of OES data retrieved on line may state "OES Wage Survey" or "ETA ALC Data Center.

[e]--Period of Employment

The "period of employment" is fairly straightforward. The employer should enter the start date when it realistically needs the H-1B workers' services to commence, and may enter a total period up to three years.

[f]--Place of Employment and "Multiple Location" Strategy

Finally, there are important considerations in how the employer enters the "location where H-1B nonimmigrants will work. If the employer has one office the response is straightforward-it will be the city and state of the office location. Employers who contemplate hiring H-1B workers at more than one location, have multiple worksites, or assign employees to work at multiple customer or client locations may specify a second place of employment listed on the LCA. The LCA will then be usable for H-1B foreign nationals to begin work at either of the specified locations, and to transfer between them.

In any such transfer the employer must pay the "required wage rate" at the new location, which is the higher of the prevailing or actual wage.

As a practical matter, the "multiple location" strategy is now limited by the LCA form, which contains space for only two locations. Prior versions of the LCA permitted any number of locations to be listed using an addendum. Consulting companies and other employers who assign H-1B workers among multiple possible locations find the new LCA burdensome because it no longer enables them to obtain LCA certification for three or more locations simultaneously. Instead, such an employer must file large numbers of separate LCAs to secure certification for multiple locations, or set up systems for monitoring employee placements and filing new LCAs as placements occur, subject to the "short term placement" rules to be discussed in the next article. Employers with "roving" H-1B nonimmigrant workers will find the record-keeping requirements of individual LCA filings for each different placement impractical and burdensome.

As a possible solution to this problem, the DOL has proposed the concept of a "national LCA." This would enable free movement of H-1B workers.to any and all worksites anywhere in the country without the need to file new LCAs. If this proposal is implemented it will restore the efficiencies of the former "multiple location" strategy and address the business practicalities of "roving" H-1B employment.

[8]--Filing the LCA

The DOL has a statutory obligation to review the LCA and issue a certification or return the form uncertified within seven working days, but in the past the DOL has been criticized for failing to meet this requirement. In efforts to speed certification, the DOL now has implemented two special centralized filing procedures for the LCA. Information on both of them can be accessed at http://workforcesecurity.doleta.gov/foreign/.

The LCA may be filed by facsimile to the special DOL telephone number of an automated processing system. Although processing of LCAs using this facsimile system was initially slow, it has improved, and certifications are now issued within two or three business days in most cases.

A special electronic version of the LCA, Form ETA 9035E, may be filed on the Internet at a special, secure DOL website, at http://www.lca.doleta.gov/. This process began in early 2002 and has worked out extremely well, with most LCAs being certified and returned as a computer file within minutes. The certified LCA is printed out and then singed by the applicant's representative.

The electronic LCA is slightly different from the paper LCA. The electronic LCA contains an additional attestation wherein the employer must acknowledge that the submission of the LCA is being made electronically and must agree to be bound by the LCA obligations. Also, employers that file the electronic LCA must sign the LCA upon its return to the employer by the DOL, after certification.

In all cases, the DOL's review of the LCA is limited to whether the form is properly completed or contains obvious inaccuracies. They do not inquire into substantive appropriateness of the prevailing wage or other representations in response to the filing, but will inquire into the representations upon a complaint and investigation.

Other Important LCA Issues to Understand: Public Access Files, "No Benching" Rule, Changes in Location and DOL Enforcement

A. Public Access File and Retention of Records

Within one working day after filing the LCA, the employer must make the LCA and certain supporting documentation available for public examination at its principal place of business in the U.S. or at the place of employment, in what is commonly referred to as the "public access" file. The required documentation for the public access file includes:

A copy of the completed labor condition application containing the original signature, including any applications that were submitted to DOL by facsimile transmission.

Documentation which provides the wage rate to be paid the H-1B worker.

"A full, clear explanation of the system that the employer used to set the `actual wage' the employer has paid or will pay workers in the occupation for which the H-1B nonimmigrant is sought, including any periodic increases which the system may provide-e.g., [any] memorandum summarizing the system or a copy of the employer's pay system or scale."

As discussed previously, employers hiring H-1B workers are advised to have a clear, written pay system, with objective criteria against which all workers are measured. This provision requires that such a system be made available to the public as evidence of the employer's compliance with "actual wage" requirements. If the employer does not have such a pay system it must create a memorandum for the public access file.

A copy of the documentation the employer used to establish the "prevailing wage" for the occupation, such as the SESA determination, expert report, or survey information, which must include a "general description of the source and methodology" of the survey.

A copy of documentation indicating that the employer has satisfied the notice of filing requirements, which would include the collective bargaining representative notification or postings.

A summary of the benefits offered to U.S. workers in the same occupational classification as H-1B nonimmigrants, a statement as to how differentiation in benefits is made where not all employees are offered or receive the same benefits, and/or, where applicable, a statement that some or all H-1B nonimmigrants are receiving "home country" benefits.[9]

Where the employer undergoes a change in corporate structure, a sworn statement by a responsible official of the new employing entity that it accepts all obligations, liabilities, and undertakings under the LCAs filed by the predecessor, together with a list of each affected LCA and its date of certification, and a description of the actual wage system and Employer Identification Number (EIN) of the new entity.

A list of any entities used as part of a "single employer" definition for determination of H-1B dependency status.

Where the employer is H-1B dependent and/or a willful violator and files the LCA only for "exempt" H-1B nonimmigrants, a list of such persons.

Where the employer is H-1B dependent and/or a willful violator and the LCA is not filed for exempt H-1B nonimmigrants, a summary of the recruitment methods used and time frames of recruitment of U.S. workers, or copies of pertinent documents showing this information.

Other categories of documentation need not be made available to the public, but must be retained to provide to an examining officer of the DOL in the event of an investigation or enforcement action. These include payroll records, individual wage data which the employer relied upon in any survey to determine the prevailing wage, and other categories of required documentation to support the employer's compliance with LCA attestations, as described above. Records must be retained throughout the period of the LCA and for one year thereafter.

B. Payment of Required Wage and Prohibition on Nonproductive Status

DOL regulations mandate that the employer pay the required wage "to the employee, cash in hand, free and clear, when due." Both salaried and hourly employees must be paid no less often than monthly.

Once the H-1B worker has entered into employment, the employer is obligated to pay the required wage continuously throughout the nonimmigrant's period of employment. The practice of "benching," or placing an employee in temporary periods of nonproductive status without pay, is prohibited. It is a statutory violation of the required wage obligation for an employer to place the H-1B worker in nonproductive status based on factors such as lack of work, and fail to continue to pay the wage level stated on the LCA and in the H-1B petition. If the LCA and H-1B petition specified that the nonimmigrant would be employed full time, the employer must continuously make full-time wage payments. If the LCA and H-1B petition designated the position as part-time, the employer must continuously pay for the minimum number of hours specified in the petition. If the LCA specified part-time employment and the H-1B petition indicated a range of hours, the employer must pay for at least the average number of hours worked by the employee, not the minimum number of hours in the range. Congress added the "nonproductive" time provisions in ACWIA in 1998 after hearing testimony about alleged widespread practices of "benching" in the computer consulting and staffing industries.

In the case of an H-1B nonimmigrant for whom a petition has been approved but who has not yet begun employment, under the ACWIA statutory provision the employer's obligation to pay the required wage begins no later than thirty days after the worker is admitted to the U.S. in H-1B status pursuant to the petition, or sixty days after the person becomes eligible to work for the employer if he or she is already present in the U.S. at the time of petition approval.

Finally, there will be no violation of the required wage obligation when an H-1B nonimmigrant experiences a period of nonproductive status without pay due to (1) non-work-related factors such as the voluntary request of the nonimmigrant for an absence or (2) circumstances rendering the nonimmigrant unable to work such as maternity leave, illness, or temporary disability. Similarly, an employer such as a school which has an established practice of paying annual salary in disbursements over fewer than twelve months will not violate the required wage obligation, provided the nonimmigrant agrees to the compressed annual salary payments. Finally, wage payment need not be made if there has been a "bona fide termination" of the employment relationship. Whether there has been a "bona fide termination" depends on the circumstances, but regulations suggest that the two factors most important to DOL are whether the employer has (1) notified INS that the employment relationship has been terminated so that the petition is canceled and (2) met any obligation to provide the employee with payment for transportation home.

C. When a New LCA Is Required for a Change in Location

H-1B nonimmigrants often must travel to locations away from their regular worksite for varying periods; occasionally, they are transferred from one location to another on short notice. Such circumstances include attending meetings, training or conferences, providing on-site consultation or support services at a customer's premises, and working as "roving" consultants who work only at customer sites and who regularly change work locations based on the employer's business need. In each case, the H-1B nonimmigrant works at a location that was not contemplated at the time of the original LCA filing.

As a result, employers of H-1B nonimmigrants are limited in how often they can require the H-1B employee to change work locations without obtaining a new LCA covering the new location; ultimately, the employer might need to file a new LCA.

[a]- Place of Employment or Worksite

The terms "place of employment" and "worksite" are interchangeable throughout the LCA regulations. These terms refer to the "physical location where the work actually is performed" by the H-1B nonimmigrant. If an H-1B employee's activities are provided at a new "place of employment," then a new LCA might be required. If, however, the H-1B employee's activities do not create a new "place of employment," then the employer need not file a new LCA. Instead, the employment of the H-1B nonimmigrant continues to be governed by the original LCA. The employer must, however, reimburse the H-1B nonimmigrant for expenses incurred in traveling to the other location on the employer's business.

Close analysis of the regulations is necessary to determine whether a particular H-1B employee is providing services at a new place of employment or whether the activities are covered by the original LCA. This is because the DOL has exempted certain work activities from consideration in the determination of the "place of employment." For example, an H-1B worker who is "stationed and regularly works at one location" may temporarily work at another location for "required developmental activity such as a management conference, a staff seminar, or a formal training course." Under these circumstances, the location will not be a new "place of employment. Note also that no time limit is specified for the developmental activity.

The most significant exemption, for technology businesses, governs "roving" employees. This exemption describes where a "particular worker's job functions" require "frequent changes of location with little time spent at any one location." If the following conditions are met, a location visited by such an H-1B nonimmigrant is not a new "place of employment":

"The nature and duration of the H-1B worker's job functions mandates [sic] his/her short term presence at the location," either where the job is "peripatetic," requiring frequent travel from location to location, or where the job requires the worker to spend most work time at one location but occasionally travel for short periods to work at another location;

The H-1B worker's travel to the location from the home worksite is on a "casual, short-term basis," which can be "recurring but not excessive," with the duration of visits not exceeding five consecutive workdays for any one visit by a peripatetic worker, or ten consecutive workdays for any one visit by the occasional traveler; and

The H-1B nonimmigrant is not at the location to perform services in an occupation where workers are on strike or in lock-out.

The regulations provide several examples of "non-worksite" and "worksite" locations based on these principles. A "computer engineer sent out to customer locations to 'troubleshoot' complaints about software malfunctions" or an "auditor providing advice or conducting reviews at customer facilities" are examples of employees at non-worksite locations. In contrast, a "computer engineer who works on projects or accounts at different locations for weeks or months at a time" or an "auditor who works for extended periods at the customer's offices" are examples of an employee working at a new "place of employment."

[b]- Area of Intended Employment

If the H-1B worker's activities create a new "place of employment," the next question is whether the worksite is in a different "area of intended employment" from that specified on the original LCA.

LCAs are valid for any location within the Metropolitan Statistical Area ("MSA") or Primary Metropolitan Statistical Area ("PMSA") in which the place of employment stated on the LCA is located, or within "normal commuting distance" of the location. Thus, for example, if an LCA states that the H-1B employee's place of employment is a particular suburb of Boston, Massachusetts, then the LCA would cover (1) all locations within the MA/NH PMSA (# 1120 in the OES Area Code lookup system, see the Quick Search function) and (2) any other locations within a normal commuting distance.

If the H-1B employee's new place of employment is within the "area of intended employment" of the original LCA, then a new LCA is not needed. The employer, however, must provide notice of the LCA at the new worksite by hard copy posting or electronic notification to workers in the occupation at the worksite.

If the new "place of employment" is outside the "area of intended employment" listed on the original LCA, then the H-1B employee's assignment to the new "place of employment" may be made as a "short-term placement" subject to the requirements described in the next section, but beyond that the employer must obtain a new LCA to cover the new area of intended employment.

[c]- Short-Term Placement

An employer may make "short-term placement(s) or assignment(s)" of H-1B nonimmigrants to new places of employment in areas of intended employment not listed on the original LCA without filing a new LCA. Short-term placements may occur only under certain conditions for strictly limited periods, and only if:

The employer has satisfied all obligations under the existing LCA covering the H-1B worker in the original area of employment;

There is no strike or lockout at the new worksite in the occupational classification of the H-1B nonimmigrant; and

The employer continues to pay the required wage based on the original LCA and also pays all lodging, travel, meals, and incidental or miscellaneous expenses associated with the H-1B nonimmigrant's stay at the new location, for both workdays and non-workdays.

The employer's "short term placement" of any one H-1B non-immigrant at any worksite or combination of worksites in a new "area of employment" may not exceed thirty workdays in a one-year period, or, under certain circumstances, sixty workdays.

The term "workday" means any day on which an H-1B nonimmigrant performs any work at any worksite within the area of employment of the short-term placement. Workdays counted toward the limit may be nonconsecutive, and may be at different specific worksites within the area of employment. Weekend, holiday, or other non-workdays do not count, even if the H-1B nonimmigrant spends them in the area of the short-term placement. Thus, the thirty-workday limit would typically be about six weeks.

To qualify for a sixty-day "short-term placement," the employer must be able to show that the H-1B nonimmigrant maintains an office or work station at his/her permanent worksite, spends a "substantial amount of time" at the permanent worksite in a one-year period, and has his or her U.S. residence or place of abode in the area of the permanent worksite and not in the area of the short-term worksite.

If the employer already has a certified LCA for the occupational classification in the new area of employment, it may not use the "short-term placement" option. Instead, it must use its existing LCA, assigning the H-1B worker to an open "slot." If there is no open slot, the employer may wish to meet the notice, wage, and other obligations under the existing LCA for the H-1B nonimmigrant being placed in the area of employment, and promptly take steps to file a new LCA. Making the placement will then result in temporary "overcrowding" of slots on the existing LCA until the new one is approved. However, the DOL has expressly stated a willingness to accommodate the "overcrowding" problem for employers having a business need to quickly move an H-1B employee and wishing to use an existing LCA. It has indicated that it will use a "rule of reason in assessing such situations; violations will not be cited as long as the employer is showing good faith and taking steps to come into compliance."

The employer may not make a "short-term placement" for an H-1B nonimmigrant's initial assignment with the employer. An H-1B nonimmigrant entering the U.S. must first be placed at a regular worksite identified on the certified LCA used to support the H-1B petition.

Once an H-IB nonimmigrant has reached the aggregate annual limit of "short-term placement" workdays in an area of employment, the employer may no longer employ the person there except under a certified LCA. As a practical matter, then, the employer should determine as early as possible after the H-1B nonimmigrant is placed in a new area if it will need the person's services there for longer than the short-term placement limit, either on the project to which he or she is then assigned or on a later project in the same area, and if so file a new LCA in sufficient time so that it is certified before the time limit is reached.

[12]- Enforcement and Penalties

Any "aggrieved person" may file a complaint with the DOL alleging that an employer has failed to meet a condition stated on the LCA or that the employer made a misrepresentation of material fact on such an application. An aggrieved party means any person or entity whose "operations or interests" are adversely affected by an employer's alleged noncompliance with the LCA, including a worker who alleges that his or pay or working conditions have been adversely affected, a bargaining representative, a competitor, or a government agency. DOL will investigate and after providing the employer with an opportunity to be heard, will determine whether it should issue a finding that a violation has taken place and assess appropriate sanctions and penalties.

The statute and regulations provide several forms of penalty or sanction, depending on the nature of the violation. These include assessment of back wages for violation of a condition related to payment of the required wage. The DOL can also assess monetary fines and other civil penalties, and can bar the employer from receiving approvals of H-1B petitions for periods of time. For nonwillful violations, the DOL can issues fines of up to $1000 per violation and bar the employer from the H-1B program for one year. For "willful" failure to meet an LCA condition or a misrepresentation, the DOL can fine up to $5000 per violation and bar the employer from the H-1B program for two years. For such "willful" violations where in the course of the violation the employer displaced a U.S. worker, the DOL can fine up to $35,000 per violation and bar the employer from the H-1B program for three years.

Important Background Issues to Understand in Preparing The Petition, Including Maintenance of Status and "H-1B Portability"

An employer seeking to hire a foreign professional in H-1B status must first file a "Petition for a Nonimmigrant Worker" with the INS. There are several procedural categories of petitions, and it is helpful to understand the distinctions. Depending on the category, there is a particular "requested action" the petitioner asks INS to perform with respect to the beneficiary. Following is a discussion of the various petition categories and related issues.

1.General or Cable Notice Petition

First, in what INS refers to as a "general" or "cable notice" petition, the foreign national is outside the United States and is being offered the opportunity to enter the country and begin new employment with the petitioner. The petition indicates that the person is outside the U.S. and requests that notification of the approval of H-1B classification be sent by cable to the U.S. consulate in the country where the person resides. The foreign national then applies for an H-1B visa to be entered in a passport, and travels to the U.S. If the person is a Canadian citizen, he or she need not obtain a visa and may enter the country as soon as the petition is approved. The person must be lawfully admitted to the U.S. in H-1B status based on the H-1B visa (or the H-1B approval notice, in the case of Canadians) to begin work.

2.Change of Status Petition

Second, the beneficiary might be in the U.S. in another temporary nonimmigrant status, such as that of an F-1 student, J-1 exchange visitor, or TN NAFTA professional. In some circumstances the person might already be working for the petitioner in the other status, such as in the F-1 student "practical training" program or TN status. This type of petition seeks authorization for "new employment" (regardless of whether the person actually works for the petitioner already in a prior status) and requests "change of status" for the person in the U.S. from the other status to H-1B. To be eligible for change of status, the person must have continually maintained, and committed no violations of, the previously accorded status, and the petition must be filed before the status expires. J-1 exchange visitors who are subject to the "two-year home residency" rule are ineligible for change of status to H-1B.

Approval of the petition will legally change the person's status in the U.S. to H-1B and commence a new period of time to remain in the country. The person will not be required to report to a consulate or take any further action, and he or she can begin work for the employer in H-1B status upon petition approval. Note that the foreign national may not begin work prior to the approval unless authorized to do so in the prior status, or this will constitute a violation rendering him or her ineligible for change of status. Indeed, if the person was authorized to work for the petitioner in the prior status but that authorization expires, he or she must stop work until the H-1B petition is approved. As long as the petition was timely filed before the prior status expired, the person is legally allowed to wait in the U.S. after expiration of status for the petition to be processed, provided he or she does not work without authorization.

3.Change of Employer Petitions and "H-1B Portability"

Third, the beneficiary might already be in the U.S. in H-1B status with another employer. The prospective employer then files a petition seeking authorization for "new employment" of the person, with a request for "extension" of the foreign national's H-1B stay in the U.S. for the period stated in the petition. Such petitions are referred to as "H-1B transfer," "change of employer," or "sequential employment" petitions. To be eligible for extension of status the beneficiary must be able to show lawful maintenance of the existing H-1B status through continued employment with the prior petitioner, and the petition must be filed prior to expiration of the alien's H-1B status.

AC 21 created a helpful concept for employers filing change of employer petitions: "H-1B portability." As a result, the H-1B status holder may begin working for the new employer as soon as it files the petition with INS, rather than having to wait until the petition is approved. Specifically, Section 105 of AC 21 specifies that a nonimmigrant alien who was "previously issued a visa or otherwise provided H-1B nonimmigrant status is authorized to accept new employment upon the filing by the prospective employer of a new petition" on behalf of the alien, provided:

The alien was lawfully admitted into the United States,

The petition is filed before the date of expiration of the authorized period of stay,

The petition is "nonfrivolous," and

The alien has not been employed without authorization in the United States subsequent to admission.

Note that, as spelled out in AC 21, the requirements for "H-1B Portability" do not include showing that the beneficiary maintains H-1B status (i.e., continues to work with a prior H-1B employer), or even that the most recent lawful admission to the U.S. and authorized period of stay was in H-1B status. Practitioners have interpreted these omissions to allow the filing of "H-1B portability" petitions and attendant work authorization where a beneficiary is in the U.S. in H-1B status but have failed to maintain status by not working for the prior petitioner, or where the person previously held H-1B status but has since changed to or left and reentered the U.S. in another status.

It is not clear, however, that Congress intended to vitiate the requirement to show lawful maintenance of H-1B status at the time of petition filing for a regular H-1B transfer, which remains a requirement elsewhere in the statute and regulations for an amendment or extension of status, or to allow persons who may be in the U.S. as tourists or business visitors, for example, to benefit from H-1B portability. INS has stated its disagreement with these interpretations and its intention to continue applying the requirement to show admission in and maintenance of H-1B status. Final clarification will have to wait until the INS issues regulations implementing AC 21, and any challenges to the regulations are resolved.

For now, in the scenario of failing to maintain prior H-1B status, the beneficiary may be legally allowed to begin work under AC 21 "H-1B portability" while a petition is pending, but not be eligible to ultimately have an amendment or extension of status approved. A logical strategy may then be to submit the petition and have the beneficiary begin work, but plan that the petition may only be approved for "cable notice" outside the country, and have the person then stop work to depart the U.S., obtain the new visa if necessary and return in "fresh" H-1B status. Because of these uncertainties, petitioners should be careful to seek expert legal counsel in any H-1B portability situation.

The employment authorization, which stems from the petition filing, continues until the INS adjudicates the new petition. AC 21 did not specify what form of documentation the employer must use to complete Form 1-9 for an "H-1B portability" worker showing the basis for employment authorization. In the absence of any other rule, the employer would be advised to use a certified copy of the petition filing along with proof of its being sent to and received by the INS, such as a U.S. Postal Service Express Mail certified or registered receipt or overnight delivery service confirmation. When the INS filing receipt arrives, it should be added to the employee's Form I-9 as additional proof of petition filing.

If the petition is approved, then the employment authorization is automatically converted to regular H-1B petition authorization, and the employer should update the 1-9 form accordingly. If the petition is denied, then the work authorization based on petition filing will cease.

Change of employer and "H-1B portability" petitions may also be filed for "new concurrent employment" wherein the beneficiary will keep working in the prior H-1B job but will also work concurrently, most likely part-time, with the new petitioner.

4.Extension of Stay Petition

Finally, the beneficiary might already be working for the petitioner in H-1B status under a prior approved petition. In these circumstances the employer may need to extend the validity of the petition if it is nearing expiration, or amend it to report a change in the employment. A straightforward petition extension will report "continuation of previously approved employment without change," and seek "extension of stay" for the beneficiary. An amended petition is required to report a "material change in the terms and conditions of employment or training or the beneficiary's eligibility as specified in the original approved petition. Such a petition reports a "change in previously approved employment" on the petition form, and requests that INS amend and if applicable also extend the beneficiary's stay. To be eligible for an extension or an amendment of stay in either of these scenarios, the foreign national must be able to show lawful maintenance of the prior status through continued employment with the petitioner under the prior approval, and the petition must be filed before the prior status expires. Where a petition seeking extension of a previously approved petition and extension of the foreign national's H-1B stay is timely filed before the prior petition's expiration, the foreign national may legally stay in the U.S. and continue working for the same employer while the extension is pending after the prior status expiration, under the same terms and conditions specified in the prior petition, for up to 240 days.

5."Out of Status" Problems

In some situations the foreign national beneficiary might be in the U.S. but not be eligible to change to or extend H-1B status because of a failure to maintain status prior to the petition filing (such as by engaging in unauthorized activities, or failing to engage in the authorized and required activities) or because the prior status has expired.

Where the problem is solely a failure to maintain status, and the person has not "overstayed" the actual period as shown on the pertinent I-94 admission record card, then, depending on the circumstances, the prospective employer might be able to file a "cable notice" petition (which does not seek any change or extension of status), and the foreign national may be able to travel outside the U.S. to apply for an H-1B visa at a U.S. consulate and then seek readmission to the U.S. in proper H-1B status to begin work. Depending on the circumstances it is possible to apply for the visa at certain consulates in Canada or Mexico as a "third country national" and return, minimizing the travel inconvenience that is experienced. However, if the visa is delayed or refused the person will usually not be eligible to reenter the U.S. until the problem is resolved, and may have to travel from Canada or Mexico direct to the home country and reapply there. [See "Change in Automatic Visa Revalidation Creates Risk for Third Country Nationals Traveling to a US Consulate in Canada or Mexico to Apply for a Visa" by this author, ILW.com Immigration Daily, March 25, 2002]. With the stricter scrutiny and additional background check procedures that visa applications now face, many consider the "third country national" process to be risky and opt to return to the home country for the application.

A problem arises when a foreign national has "overstayed" by remaining in the U.S. beyond the authorized expiration date of a prior status, or has affirmatively been found in violation of status by the INS. In this situation the person is "unlawfully present." At a minimum, the person must return to his or her home country to apply for an H-1B visa to be eligible for re-admission in H-1B status, unless a special "extraordinary circumstances" exception applies to allow visa application in a third country. If the length of time since the status expiration or violation finding has exceeded, respectively, 180 days or 1 year, the person will be subject to a three- or ten-year bar on re-entry as a consequence of the "unlawful presence." The employer should immediately seek expert counsel if one of these situations is presented. [Further strategies for addressing "out of status" problems will be discussed in a later article in this series.]

6.Counting Against the H-1B Cap

The cable notice and change of status in the U.S. petition scenarios are considered to be new H-1B petitions subject to the H-1B cap, unless the foreign national has been previously "counted" pursuant to an H-1B petition approved within the prior 6 years, and has actually been in the U.S. in H-1B status within the previous 1 year. The change of employer, concurrent employment, amended petition, and extension of status scenarios all involve a beneficiary who is already in the U.S. in H-1B status, and they are therefore not subject to the cap. Certain petitions are not counted against the cap regardless of the requested action or H-1B history of the beneficiary. These include petitions by an institution of higher education or a related or affiliated nonprofit entity, by a nonprofit research organization, by a governmental research organization, or for certain physicians who have received a waiver of the "J-1 foreign residence requirement" to practice in a medically underserved area.

Preparing the Petition

A complete H-1B petition package consists of the following materials:

Form G-28, Notice of Entry of Appearance of Attorney, if the employer is represented by counsel;

Filing fee, in most cases $1,130, but in some cases $130;

The Petition for a Nonimmigrant Worker, INS Form I-129, plus H Supplement;

INS Form I-129W;

Labor Condition Application certified by DOL;

Documents evidencing this foreign national beneficiary's identity, such as the passport and if in the U.S. a state issued driver's license;

Documents evidencing the foreign national's lawful admission and maintenance of status, if in the U.S. in H-1B or another nonimmigrant status; and

Petitioner's supporting letter Petitioner's supporting documentation

Any necessary application of family members to change to or extend H-4 nonimmigrant status.

The I-129, H Supplement, and I-129W Forms must be carefully completed. In Part 2 of the I-129 Form, for example, the petitioner specifies a basis for the petition and a requested action from INS, as described above. Part 3 of the form seeks important personal information about the foreign national and about his or her status at the time of petition, if any, in the U.S. Part 4 seeks further relevant processing information concerning the petitioner's requested action, including any consulate to which the petitioner requests that notice be provided of approval, and the foreign national's prior immigration history. Errors in these sections can cause a petition that is not subject to the H-1B cap to be processed like one that is subject to the cap, delays in petition processing at the service center or relative to a visa application abroad, incorrect material information being listed in the INS case approval or record of action which must be corrected, or other problems.

Of particular importance in the post 9/11 environment is attention to detail in entering the correct spelling of the H-1B beneficiary's full name and the correct date of birth. Starting in early 2002, INS implemented a procedure of background checks for all individual petitioners, applicants or beneficiaries in the "Interagency Border Inspection System" (IBIS) database, which contains a variety of law enforcement, customs and immigration records. If any of the beneficiary's identifying data in the petition is incomplete or incorrect it will at minimum slow down the IBIS record check process and may cause an unintended "hit" in the database that will take weeks or months resolve. INS advises that to speed the IBIS process the petitioner should spell out all first and middle names in full, rather than using initials, and include copies of identifying documentation on the beneficiary such as the passport data page and (where applicable) a social security card and driver's license.

Other questions in Part 5 and on the "H Supplement" to the form seek information about the petitioner's business and its gross income and number of employees, the title, salary, and description of the job, and the beneficiary's credentials and work experience. The petitioner should prepare concise, well-thought-out answers to these questions to quickly establish for the INS, in summary fashion on the face of the petition, that the employer is a viable enterprise, that the position is a specialty occupation, and that the beneficiary has the appropriate qualifications for the occupation.

Part 5 also requires specification of the address where the person will work. If this address differs from the one on the front of the form, perhaps representing a particular client site or a separate office of the petitioner in another city, the appropriate work location should be entered. If the position involves a known itinerary of multiple locations, the itinerary should be included, with all the dates and locations where services will be performed. If the position involves the potential for relocation to multiple unanticipated locations based on business needs, without a known itinerary, the petition should identify the initial location, or if the initial location is unknown, the location constituting a permanent home base, and include a statement about the potential for reassignment. Such scenarios arise where a large company has multiple office locations around the country and wishes to retain flexibility to transfer H-1B workers between its offices, or where a consulting or staffing company has clients in multiple locations and expects to reassign H-1B workers at the conclusion of a project. When the beneficiary is outside the U.S., often the actual location where he or she will perform work after entering the country is unknown when the petition is prepared. Then it is appropriate to insert the "permanent home base" location on the petition.

The form also requires specification of the "dates of intended employment" in Part 5, another matter needing careful attention. The requested period for an initial petition or an extension may be up to three years, or until the end of the validity period of the LCA, whichever occurs first. It is important to be aware that the H-1B worker's initial period of stay in the U.S. in H-1B status may not exceed six years. Therefore, if a full three-year petition validity would exceed the foreign national's six-year maximum stay, the requested period must be shortened accordingly. It then becomes important to list with precision on the H Supplement all the foreign national's prior periods of stay in the U.S. in H classification. If the foreign national has spent time outside the U.S., the periods of stay should be broken out by entry and exit to reflect only the time actually spent in the country. The exact number of months and days in the U.S. in H-1B status can then be totaled and used to calculate the full balance of time available to make up the six-year maximum. That period of time is then used for the requested petition period. In this manner, the petition ensures that time spent outside of the U.S. is "recaptured" so that the person is granted a full six years in the U.S. ["Recapturing" time will be discussed further in a later article in this series].

When the foreign national has reached the six-year maximum period of stay in the U.S. in H status, he or she may then qualify for additional periods of extension of stay in one-year increments, if an employer has taken steps in a permanent residence process for the person under AC 21 and additional amendments enacted in November 2002. H-1B nonimmigrants may extend H-1B status in one-year increments beyond six years if 365 days or more have elapsed since:

(a) the alien's employer filed a labor certification application for the alien with the DOL or,
(b) in cases where labor certification is not required, the employer or the alien filed a Form I-140 Immigrant Petition with the INS.

Extension of H-1B status beyond six years is also available to foreign nationals who have not been able to file an Adjustment of Status application because per-country limitations have prevented their priority date from being current. The foreign national must have an approved INS Form 1-140 petition to qualify for the extension. The extension lasts until the Adjustment of Status application is adjudicated.

If the H-1B nonimmigrant does not qualify for a seventh-year extension pursuant to the AC 21, then H status will be unavailable until the foreign national has resided and been physically present outside the U.S. for a full year. Brief trips to the U.S. for business or pleasure are allowed and are not interruptive of the year, but such time spent in the U.S. may not count toward fulfillment of the required time abroad.

It is important to read all of the form instructions carefully because they are expressly incorporated into the governing regulations for the petition process.

Finally, the petition forms must be signed by an authorized official of the employer, such as a human resources representative, a manager in the department where the foreign national will work, or a company executive. By signing, the official attests under the penalties of perjury (1) that all information in the petition is true and correct, (2) that he or she expressly agrees to abide by the terms of the labor condition application during the petition period, and (3) that the company will be liable for the reasonable costs of return transportation of the foreign national abroad if he or she is dismissed from employment by the employer before the end of the period of authorized stay.

It is also important to complete the I-129W form carefully. This form collects data on the education level, field of study, and salary of the alien, and is used to (1) report whether the employer is H-1B dependent or a willful violator, and, if so, to claim any applicable exemption from the additional LCA attestations associated with such status, (2) claim exemption from the $1,000 education and training portion of the filing fee, and (3) claim exemption from the H-1B cap annual numerical limitation.

If any of the forms are not completed and signed properly or the proper fee is not attached (see below), then the INS service center will "reject" the petition and mail back the entire filing.

If the petition materials were prepared by counsel, the employer must sign Form G-28, on which the attorney enters his or her appearance as the employer's representative. Most employers have their own attorney prepare the petition papers, but some direct the foreign national beneficiary to hire his or her own attorney or otherwise to manage the process. This is permitted under law, but the employer should remember that any attorney the foreign national hires would be representing the company before the DOL and the INS, regardless of who pays the fees, because the Labor Condition Application and H-1B petition process is, legally, the responsibility of the company sponsor, not of the foreign national.[10]

The employer might not be comfortable being represented by an attorney with whom it does not have a regular relationship and who prepares forms and other documents for it which, when signed, create binding legal obligations to the government and to the foreign national. As a result, most employers retain their own corporate immigration attorney.[11]

There are petition filing fees to be paid. In most circumstances the petition filing fee is $1,130, which consists of a base filing fee of $130 plus an additional fee of $1,000 mandated by ACWIA and AC 21, also known as the "education and training" fee. This total is normally remitted in a single payment. Certain categories of employers, and certain types of petitions, are exempt from the "education and training" component of the fee:

(1) The following categories of employers are exempt from the $1,000 education and training fee:

primary or secondary education institutions,

institutions of higher education, nonprofit entities affiliated with such institutions, and nonprofit entities which engage in established curriculum-related clinical training of students registered at such institutions,

nonprofit research organizations (a "nonprofit research organization" is an organization that is qualified as a taxexempt organization under Section 501(c)(3), Section 501(c)(4), or Section 501(c)(6) of the Internal Revenue Code, has received approval as a tax-exempt organization from the Internal Revenue Service, and is "primarily engaged in basic research and/or applied research"), and governmental research organizations.

(2) The categories of petitions exempt from the fee include:

petitions making a second or subsequent request for extension of stay for the alien;

an amended petition that does not request any extension of stay beyond the period previously granted; or

a petition to correct an INS error.

To claim the partial filing fee exemption, the employer checks the appropriate box on Form I-129W, identifying a basis for the exemption and submits the petition with one payment for $130.

It is important to note that the employer must pay the $1,000 education and training component of the filing fee. The INS will accept the fee only from the employer or its authorized representative, and the employer may not require the foreign national to reimburse or compensate it for the fee, nor may the employer accept any reimbursement or compensation offered by the foreign national.

The petition must include a Labor Condition Application certified by the Department of Labor in the occupational specialty. Where the LCA has been certified by DOL for multiple position openings, the petitioner should attach a "Detail Sheet" listing the beneficiary names, date of filing, and INS file numbers for all prior H-1B petitions that the LCA has been filed with, to demonstrate that all the "slots" have not been used.

If the requested action for the H-1B petition is an extension, amendment, or change of status in the U.S., the petition package must include evidence establishing that the beneficiary was lawfully admitted to the U.S., that said beneficiary has maintained his or her nonimmigrant status since admission, and that the petition is timely filed before expiration of the prior status and any applicable grace period. This typically includes copies of the foreign national's most recent I-94 admission record card, any INS approval notices for H-1B or another status, documents showing student or exchange visitor status, any INS employment authorization (such as an EAD card), and documents outlining the foreign national's activity in the prior status, such as copies of pay statements showing employment with a prior authorized employer, or a school diploma and transcripts. If the prior status was H-4 or another derivative status as the dependent of a principal foreign national, the documentation must also include evidence of the principal's maintenance of status.

The H-1B petition package should include a supporting letter from the petitioner on company letterhead, describing in greater detail than fits on the forms: (1) background information about the petitioner and the nature of its business, (2) the position offered and its requirements, and (3) the foreign national beneficiary's qualifications to perform the position offered. The purpose of the letter is to present in detail the petitioner's case for approval of the petition, clearly addressing all applicable legal requirements. Like the forms, the letter is typically signed by a human resources official or a manager/executive in the area where the foreign national will work.

The statements in the company letter should be substantiated with supporting documentation. At a minimum, the petition must include independent evidence generally showing (1) the nature and viability of the employer's business, (2) that it is capable in good faith of making the job offer, (3) that it has the financial ability to pay the wage stated in the petition, and (4) that the foreign national has the appropriate academic and/or professional credentials to qualify for the specialty occupation. The actual quantity and variety of supporting documentation the petitioner includes may vary, subject to the judgment of petitioner and counsel and depending on the extent to which the petition is straightforward or presents unique or unusual circumstances calling for special evidence or additional argument.

In general, all petitions will include at least the petitioner's annual report and general promotional literature, and a resume, academic degree, and transcript of the foreign national, with evaluation of the education credentials if they were earned outside the U.S. Smaller and less-established or start-up businesses should submit additional evidence concerning operational status and finances of the company. If the foreign national does not possess a straightforward academic degree normally required by the specialty occupation, the documentation should include professional training certificates, letters verifying prior employment experience, other evidence of qualifications, and/or college official or "recognized authority" evaluations. The employer may also wish to include special evidence concerning the "specialty occupation" status of the job, such as an expert report evaluating the position and its requirements.

Copies of supporting documents may be submitted rather than originals. Where the petitioner or attorney has access to original documents, it is good practice to submit "certified" copies prepared by the attorney.

The petition package is submitted in duplicate signed originals of the relevant forms accompanied by duplicate copies of the other materials. The INS will forward the duplicate petition package to any U.S. consulate for which the petitioner requested that INS provide notice of approval.

Finally, if the foreign national is in the U.S. and seeks to change or extend status, and is accompanied by dependent family members, there will normally be a separate application of the family members to change to or extend H-4 status. This application should be filed even if family members already have H-4 status for some extended period based on the principal's H-1B approval with a prior employer, in order to keep the family members' H-4 status periods co-extensive with any new period of H-1B status that is granted to the principal. Failure to take this step often leads to the family members' inadvertently overstaying their legally authorized stay in the U.S. The Form I-539 application of the family members is submitted as part of the overall H-1B petition package, and should include copies of the passport, visa, and I-94 admission record cards, any prior extension or change of status approval notices, evidence of the family relationship with the H-1B principal such as marriage and birth certificates, and a separate filing fee of $140.

Filing the Petition with INS

The H-1B petition is filed by mail or express delivery, with the INS service center having jurisdiction in the area where the foreign national will work. There are four service centers in Vermont, Texas, Nebraska, and California with jurisdictions roughly in the eastern, southern, central, and western states, respectively. If the petition refers to multiple locations where the foreign national will work and includes an itinerary, the petition is filed with the service center having jurisdiction where the petitioner lists an address on the I-129 form. Similarly, if an H-1B beneficiary plans to perform services at multiple client sites which are not known at the time of petition filing, the petition should be filed with the service center having jurisdiction over the employer's corporate headquarters or other "home base" for the worker, as shown on the petition.

In the past, large employers have qualified for centralized filing of all petitions with one service center regardless of the job locations in an arrangement known as "sole jurisdiction." This generally required the petitioner to have its corporate headquarters or a major operating center in the jurisdiction of the particular service center, and to be a filer of a "substantial" number of petitions. Petitioners accepted into this program must include a copy of the letter from INS granting "sole jurisdiction" with each petition filing. The INS is no longer accepting new participants in this program, but will continue to honor the program for participants who are already accepted.

After a petition has been filed, the service center will send counsel for the petitioner, or the petitioner if he or she is pro se, a "Notice of Action" acknowledging that the petition has been received. This will include an INS petition file number and a telephone number for checking the status of the case through an automated system or with an "Information Officer" during business hours. Using the receipt number, the status of a petition may also be checked on-line through the INS web site at http://www.ins.usdoj.gov, in a new "Case Status On-line" feature added in October 2002. The Notice of Action will also include a range of time it "usually takes" for processing the particular type of case. These estimated processing times, which are also reported on the automated systems can be inaccurate. Actual processing times for H-1B petitions fluctuate widely through the year depending on factors such as whether the petition is subject to the cap, the point during the annual fiscal year H-1B cycle at which the petition is filed, competing short-term resource allocation priorities at the service center, and directives from INS headquarters. A service center may suddenly stop processing a category of petition for several weeks or even months. These delays are usually unforeseen and cause extreme frustration as petitioners wait for a seemingly interminable period for processing to resume. There is also variation in processing times among the service centers.

The INS has developed an information system whereby the service centers now release "Just in Time" reports at least once a month to the American Immigration Lawyers Association which describe their progress in processing various categories of petitions and applications. The Information Officers also provide this information over the telephone. These reports are usually more accurate than the "official" processing times stated in the receipt notices. Most H-1B petitions are processed to the initial response stage within one to three months, except when the cap quota has been reached for that fiscal year. Occasionally, however, particularly at the California service center, processing times have reached five months or more.

Petitioners frequently have an urgent business need for the services of the H-1B professional and feel they will be harmed by waiting an unpredictable and lengthy processing time and, for this reason, they wish to have petition processing expedited. To address this need, Congress authorized a "premium processing" program for filing of employment-based petitions with INS whereby "business customers" may receive certain enhanced services in return for paying an extra $1,000 fee, to be used by INS for additional staff and infrastructure improvements. This process was made available for H-1B petition filings effective July 30, 2001. In a "premium process" filing, the petition is submitted with the additional fee and a new form I-907, to a special address established at the Service Center solely for such filings. The petitioner will receive a guaranteed response to a petition filing within 15 calendar days, either an approval, request for additional evidence or notice of intent to deny, and will have fax and/or e-mail access to the service center for responding to an RFE and receiving notification of actions taken. If the response is a request for evidence, a new 15-day guarantee period will begin when the additional evidence is submitted. The petitioner can include a self-addressed overnight delivery service envelope for immediate shipment of the Approval Notice.

Premium processing has proved popular despite the high fee because it enables petitioners and beneficiaries to engage in regular planning for a start date, in scenarios where employment cannot begin until petition approval. "H-1B portability" was also designed to alleviate the frustrations of lengthy adjudication and consequent harm to employers, at least in "H-1B transfer" cases, by allowing such beneficiaries to begin work for the new company much earlier, and does not require any additional fee. Premium processing is thus most useful in out-of-country cable notice petitions, or change of status petitions where the previous status does not allow the employment. In all cases though, premium processing has the benefit of getting an answer from INS promptly and eliminating long periods of uncertainty in the process.

Prior to the availability of "premium processing," each service center had a defined procedure to request expedited handling for urgent petitions. These procedures have now been discontinued for all but non-profit petitioners. In making the request, such a petitioner must be able to demonstrate a true humanitarian emergency such as a life-or-death need for the beneficiary's services, or a truly extraordinary business need, tied to specific dates, with a major, demonstrable loss of revenue or similar harm that will result if the person is not able to perform the services requested without delay. The petitioner must also be able to show that the expedite request does not result from its own failure to take timely action when it became aware of these circumstances. In practice, expedite requests that state generally that a person is needed "as soon as possible" for an "urgent project" are almost never granted, no matter how vociferous the petitioner's protestations that the project is vital to the company. If the petitioner can afford it, premium processing is the only way to be sure to have the urgent need addressed.

Requests for Evidence

After its initial review of the petition, the service center may send the petitioner a "Request for Evidence" ("RFE") indicating that certain required initial evidence is missing, or that the evidence submitted either does not fully establish eligibility for the requested benefit or raises underlying questions regarding eligibility. The petitioner is given twelve weeks from the date of the notice to respond. No extension of this twelve-week response time is possible, nor are interim benefits granted during the period prior to the submission of additional evidence. During the twelve-week response period the petitioner may (1) submit all the requested initial or additional evidence, (2) submit some or none of the requested evidence and ask for a decision based upon the record, or (3) withdraw the application or petition. If the petitioner does not respond within the time limit, the petition will be considered abandoned and will then be denied.

The RFE will list the specific areas of eligibility under the applicable standards about which the INS adjudicator has concerns, quoting liberally from the regulations and listing categories of additional evidence the INS requests in order to respond to its concerns. In recent years practitioners have complained to the INS about overly broad "shotgun"-style Requests for Evidence which do not give a clear picture of the specific areas of concern but vaguely advise the petitioner that it must submit additional evidence in all areas, or recite very long, standard lists of documents, many of which the petitioner might have already sent, or which might be completely inapplicable to the case. In response, INS has stated that it will train its officers to be more focused in their requests.

Nevertheless, the requests can go on for several pages and appear to impose a daunting burden. Many petitioners' first reaction is to call the INS and complain, or try to speak to someone to clarify the request. The service centers will not discuss the requests over the telephone, and Information Officers are instructed to tell petitioners to prepare the response as best and thoroughly as they can and to argue in a letter if they feel certain of the requests are inappropriate or unnecessary. Under the regulations, the petitioner has only one opportunity to respond.

The petitioner should resist the temptation to hastily prepare an application because of an urgent need for the beneficiary's services. It is prudent to take the time to compile thorough supporting documentation and/or prepare additional argument. An RFE invariably requires submission of more documentation on a particular issue than that which might have been sufficient in the initial submission, and this can cause significant delay and expense. For these reasons, in the initial submission it is best to err on the side of more thorough preparation so that the case will be approved upon initial submission without the need to respond to a Request for Evidence.

Regular practitioners in the H-1B field tend to share information and can thus spot trends in service center issuance of RFEs. Periodically, one service center or another will seem to be issuing more RFEs or will seem to be concentrating them on particular issues. Sometimes this comes from a shift in personnel in the H-1B adjudications area, where newer examiners tend to apply evidence criteria more strictly, and other times from a service center initiative to focus on a particular area of concern in the H-1B program.

In submitting the petitioner's response to the RFE, it is important to return the RFE itself with the evidence, which will facilitate the new submission being matched up at the service center with the file for final review.

If there is a request for change or extension of status pending and the beneficiary's prior status has expired, the foreign national may continue to wait legally in the U.S. throughout the RFE process. Similarly, work authorization arising under the H-1B provision of AC 21 will continue.

The Notice of Approval

After consideration of all the evidence, the service center may approve the petition. It will then send the petitioner a written notice of the approval on INS Form I-797 ("Notice of Action") containing the beneficiary's name, the classification approved (H-113), and the petition validity period. The notice will specify the U.S. consulate that was notified if the petition requested such action. If the petition requested a change or extension of status for the beneficiary in the U.S. and the service center finds the beneficiary eligible for change or extension of status, it will approve that request at the same time. In such a case the notice of approval will include a tear-off section at the bottom specifying the new or continued H-1B status for the person in the U.S. and the period of stay authorized. A portion of the tear-off section constitutes a new "Form I-94 Departure Record Card" to replace the I-94 card the person would have been issued upon his or her last entry into the U.S.

It is important to check all the details on the notice of approval right away, particularly the spelling of the beneficiary's name, his or her birth date, the petition validity period, and the I-94 Departure Record Card number (which should match the number on the prior card). If any errors are discovered, a new notice of approval should be requested immediately to correct the mistakes. Each service center has its own procedure.

In some circumstances, the service center may approve H-1B classification for the beneficiary but not a requested change or extension of status. The petition is then "converted" to a general petition, and the petitioner is usually given the opportunity to request notification to a particular consulate. Expert counsel should be sought before the foreign national departs the U.S. to apply for an H-1B visa at a U.S. consulate, however, because the underlying reason for denial of the change or extension of status may also cause problems at the consulate with the visa application, leading to the foreign national being denied permission to return to the U.S. at that time (or permanently).

Normally, the service center processes any application for change to or extension of H-4 status for family members along with the H-1B petition for the principal beneficiary, and will send a separate Form I-797 Notice of Action approving the H-4 status for each family member at the same time as the H-1B notice of approval. All details on these notices should be checked carefully, particularly the H-4 validity period to make sure it is co-extensive with the principal's H-1B period. Sometimes the application for change or extension of H-4 status becomes separated at the service center from the primary H-1B petition, and it therefore takes longer to process. It is important to take any necessary follow-up steps to make sure the H-4 application is properly approved, and that each family member receives his or her appropriate notice, to avoid any problems of inadvertent overstay or unlawful presence.

The H-1B Visa Application and Entry into the United States

For a beneficiary located outside the country, the next step is to apply for an H-1B visa at the U.S. consulate in his or her country of residence. This generally requires submission of a passport, certain visa application forms,[12] original INS notice of approval, copies of the I-129 Forms, the LCA, a company supporting letter and other petition supporting documents, an original academic diploma and transcript, other relevant professional credentials, photographs, and a fee. The foreign national must report for an interview to answer basic questions about the company, its job offer, and the foreign national's claimed credentials. The purpose of the visa interview is not to readjudicate the petition but to verify through face-to-face questioning that all the representations about the job and the foreign national's qualifications contained in the petition are, in good faith, true.

Actual procedures at U.S. consulates around the world for visa applications vary based on the volume of applicants who are seen at the consulate, concerns with fraud, and other local practices. In some posts, for example, an applicant must make an appointment for an interview several weeks in advance, whereas in others interviews are conducted on a walk-in basis or are not required at all unless the consulate specifically requests one after initial review of the application which is submitted by mail, courier, or through a drop-box on consular premises. The actual level of documentation that must accompany the application also varies. Some consulates will issue a visa based on the Notice of Approval, without additional materials, or even based only on the INS cable notification. Others require all the materials listed above and scrutinize them carefully.[13] Generally, consulates in western European countries are more flexible and "user-friendly," whereas consulates in India, China, Russia, and Ukraine, among other locations, have more strict policies and procedures due to the high volume of applicants and concern over alleged patterns of applicant fraud.

It is important to understand that the relevant government agency the applicant reports to at a U.S. consulate is the U.S. Department of State ("DOS"), not the INS. DOS has its own guidelines, policies, and regulations for issuance of visas stated in the "Foreign Affairs Manual" ("FAM"), a reference governing all operations at the consulates.

The consulate will generally not question a decision INS has made in an H-1B petition based on the evidence before it. However, petition approval does not per se establish that the foreign national is eligible to receive a visa. If the consular officer is not satisfied with the answers provided in the interview, he or she can refuse the visa. The typical reasons for visa refusal that consulates give are: (1) the employer is not making a bona fide job offer, because it does not have sufficient operations or financial resources to show a need for the alien's services or ability to pay the wage offered, (2) the job offered is not in fact a specialty occupation, (3) the alien does not have the proper qualifications for the specialty occupation, or (4) there has been some other fraud or misrepresentation.

There are two types of refusal actions taken by consulates: (1) the consulate might simply inform the person that he or she has not presented sufficient documentation to warrant issuance of the visa, advises as to what is needed to satisfy the concern, and allows the person an opportunity to return later with the requested items, or (2) in the more problematic scenario, the consular officer learns, during the interview or a follow-up investigation, of specific information "unavailable" to INS in its adjudication process that contradicts information in the petition filing. In this case, the consulate can deny the visa application and refer the petition back to the INS with a report summarizing the officer's concerns and recommending that the petition approval be revoked. In some consulates, a large percentage of H-1B visa applicants are, after an initial screening interview, referred for a more detailed interview specifically designed to investigate potential fraud in the foreign national's credentials. Most fraudulent representations concern failure to possess academic degrees or appropriate experience and/or technical skills. Consulates scrutinize the bona fides of a company and its job offer carefully if the company is small or a start-up. The consular officer may require more information than the INS did regarding the company's "ability to pay" the wage, for example, such as quarterly tax returns and current financial statements, and the officer may look very closely at the documented level of gross income compared to the number of H-1B applicants being processed. If the consulate is not satisfied that demonstrated cash flow will immediately support salaries for the entire group of workers, it will refuse the visas. This stems from a concern that a peson not be admitted to the U.S. and then become a "public charge" due to the employer's nonpayment of a promised salary. This concern is more acute where there are H-4 family members applying with the principal, all of whom will require support from the putative salary.

In the wake of the 9-11 terrorist attacks, Congress and the State Department have enacted several measures to enhance national security in the visa application process. Under the Enhanced Border Security and Visa Reform Act of 2002 ("EBSVRA"), for example, consulates must conduct a special background check on all visa applicants from certain countries designated "state sponsors of terrorism" (currently North Korea, Cuba, Syria, Sudan, Iran, Iraq, and Libya), which can add significant delays to the normal visa processing period. On its own initiative, through most of 2002, the State Department imposed a special 20-day background check for all male applicants aged 16 to 45 from a broader list of 26 predominantly Muslim countries, which in practice caused months-long delays in visa processing. That procedure has ostensibly ended, but at its discretion the State Department may impose additional visa-screening procedures at any time. Applicants should plan accordingly and be prepared for delays.

Any spouse or dependent children under twenty-one years of age planning to accompany the principal H-1B foreign national to the U.S. may apply for H-4 visas at the same time as the principal, or they may apply at a later date and "follow to join." Note that persons in H-4 status are not authorized to accept employment. They may, however, engage in study at a public or private school.

The H-1B and H-4 visas are normally issued for a period coextensive with the petition approval. Usually, the visas are valid for multiple entries into the U.S. At some consulates "reciprocity" issues with the host country dictate that these visas be issued for a shorter period or for fixed numbers of entries.[14]

If the H-1B visa is granted, the foreign national and any family members who have H-4 visas may then travel to the U.S. At the port of entry, they may request admission for the period of the petition approval plus ten days. The ten days, if it is added to the period of admission, allows a grace period at the end of the petition validity for a person to wind up affairs and leave the U.S. It does not extend authorization to work for that period. The beneficiary may also seek entry up to ten days before the beginning of petition validity to get settled before beginning work. Having an H-1B or H-4 visa does not guarantee admission, however; the INS inspector at the port of entry may interview the foreign nationals and refuse admission if grounds of inadmissibility are identified.

Canadian citizens, who are visa exempt, may use the Notice of Approval to apply for admission directly at the border without going through the visa process.

In another new procedure added in the wake of 9-11, certain entering H-1B and H-4 nonimmigrants will be subject to "special registration." These persons will be fingerprinted and photographed at the time of admission, and then must report to INS, in person, 30 days after arrival, every 12 months, upon a change of address, employment or school and when departing. At the present time, those subject to the procedure upon entry are all nationals of Iran, Iraq, Libya, Sudan and Syria. Males 16 or older who are nationals or citizens of those countries as well as an expanded list of Afghanistan, Algeria, Bahrain, Eritrea, Lebanon, Morocco, North Korea, Oman, Qatar, Somalia, Tunisia, United Arab Emirates or Yemen, who entered the U.S. prior to certain dates in September 2002 must also report to INS for registration.

Entering the U.S. and Beginning Work

Once the foreign national has been admitted to the U.S. in H-1B status, he or she may begin work immediately (or at the petition validity date, if he or she entered in the advance ten-day window), and must start work or otherwise go on the employer's payroll within thirty days. Under the rules governing "nonproductive status" added by ACWIA, the employer must commence payment of the wage specified in the H-1B petition no later than thirty days after the person has been admitted to the U.S. Note that the employer has no obligation to make any wage payments or otherwise take employment action as long as the beneficiary remains in his or her home country. As a result, if the employer needs more time to place the person in the employment described in the petition, it should instruct the person to wait abroad and not enter the U.S. Once the person enters the U.S., the employer assumes responsibility for him or her and has a legal obligation to commence payment of the salary regardless of its business circumstances.

If the approval grants a change to or extension of H-1B status, and the person is in the U.S., he or she can similarly begin (or continue) work immediately, or at the beginning of the petition validity period if the date is in the future. When the beneficiary is present in the U.S. on the date of petition approval, the wage obligation imposed by ACWIA is that payment of the offered wage begin within sixty days after the date the person becomes eligible to work. The employer must be prepared to hire and begin paying the person within that time frame once it receives notice of the petition approval. If the foreign national is already working for the employer pursuant to the H-1B portability provision of AC 21, the petition approval converts the employment authorization into "regular" H-1B status.

Once the foreign national has begun employment under the approved petition, ACWIA requires the employer to pay the offered wage on a regular basis throughout the employment. If the employer places the foreign national in a nonproductive status and fails to pay the wage offered for the number of hours specified on the LCA and in the INS Form I-129 petition, it will have violated its ACWIA wage obligation and the Labor Condition Application. If the employer listed a range of hours on the LCA and in the Form 1-129 petition, then the employer must maintain pay during any nonproductive "benched" time at a level commensurate with the average number of hours the foreign national actually worked before being placed in nonproductive status.

The wage obligations are not applicable if the foreign national makes a voluntary request for an absence or there are other circumstances rendering the person unable to work. Thus, for example, if the person is already in the U.S. in H-1B status with another employer and wishes to postpone the new employment start date, he or she may make a voluntary request to the new employer. Such a request will preserve the ability to start work at a later date and the new employer, provided it keeps documentation of the voluntary request, should avoid liability under ACWIA.

The employer must also remember to comply with its obligations under INS Form 1-9 at the time the H-1B worker begins work. The person's foreign passport and his or her I-94 card showing H-1B status in the U.S. constitute the required documentation showing identity and employment authorization. Moreover, when the foreign national is in the U.S. and has been granted a change to or extension of H-1B status, he or she will receive the relevant I-94 card as part of the approval notice.[15]

Finally, once the H-1B beneficiary has safely entered the U.S. and begun work, it is useful to remind the person (1) that the H-1B status in the U.S. only remains valid as long as he or she maintains the H-1B employment specified in the petition, with a failure to maintain the status being a ground of deportation, and (2) there is an obligation to report any change of address to the INS within 10 days of the move. INS has announced plans to strictly enforce this long-standing requirement. The report is made to a special INS address on Form AR-11, which can be obtained, with all necessary instructions, at the INS web site.[16] Failure to comply can be a ground of deportation.

Post-Approval Travel and Visa Processing

Individuals who have had their status changed to H-1B in the U.S. or who have had H-1B status amended or extended need not obtain a visa or do anything else to legally begin (or continue) work with the petitioner in the U.S., and they may stay in the U.S. and continue to work for the petitioner for the full period of status granted. Eventually, though, the H-1B employee who joins a company in this manner might wish to travel outside the U.S. Then counsel must be prepared to give advice regarding procedures for securing a smooth re-entry.

First, in certain circumstances, such persons may travel to Canada or Mexico for up to thirty days without applying for or renewing any visa in their passports. The Notice of Approval document for change or extension of status with the attached I-94 may be presented for re-entry along with the passport and prior visa in a process called "automatic revalidation." This procedure is not available for nationals of a "state sponsor of terrorism" country (currently, North Korea, Cuba, Syria, Sudan, Iran, Iraq, and Libya) or anyone who applies for a new visa while in Canada or Mexico and has the application delayed or refused.

For travel anywhere else, or in order to visit Canada or Mexico for more than thirty days, the person will need a valid H-1B visa in the passport to return (unless he or she is Canadian). If the person was granted change of status in the U.S. from another status, he or she must apply for an H-1B visa, under the procedures described above, at a U.S. consulate abroad before returning. In addition to the documentation listed, he or she should bring proof of continued employment with the petitioner such as a current employment verification letter and copies of recent paychecks. The foreign national may apply at a consulate in his or her home country or by special appointment at a U.S. consulate in Canada or Mexico as a "third-country national." [17] Many foreign nationals who have changed status in the U.S. want a visa entered in their passports as soon as possible, so they schedule a trip to Canada or Mexico just for this purpose. The foreign national may also be allowed to apply in any other country he or she may travel to for a legitimate business or pleasure purpose, at the discretion of the consulate in that country.[18]

If the person held H-1B status in the U.S. and already had an H-1B visa in his or her passport, it is not necessary to obtain a new visa relating to the new employer's petition so long as the prior visa remains valid. The person may travel out of the country and apply for re-entry to the U.S. using the old visa presented in combination with the new notice of approval relating to the new employer's petition. It is very important that he or she specifically ask the inspection official to be admitted for the full, longer period of the new petition. Foreign nationals frequently fail to make the correct request and are then readmitted to the U.S. for less time than had been granted in the new petition. Corrective action must then be undertaken.

At his or her option, the foreign national may apply for a new H-1B visa based on the new petition any time before the old visa expires, which some find preferable to applying under the old visa before it expires because this avoids the potential for confusion over the admission period upon re-entry to the country. After the prior visa expires, if the new visa has not yet been issued, the foreign national must apply for the new H-1B visa in order to return to the U.S. unless the Canada/Mexico "automatic revalidation" exception applies.

A person who was previously granted an H-1B visa has two options for obtaining a new one. First, he or she may follow the procedures above for an application outside the U.S. at a consulate. Second, within a period beginning sixty days before visa expiration and ending one year after visa expiration, the person may apply for visa revalidation by mail with the U.S. Department of State.[19] The latter procedure allows the applicant to obtain a new visa without leaving the U.S., so it is very desirable to some people even though the applicant must send off his or her passport for several weeks.

Any time a foreign national travels in or out of the U.S., regardless of the status of any visa in the passport, it is advisable to carry proof of current employment, the H-1B notice of approval, and copies of the I-129 petition form and applicable Labor Condition Application. Port of entry inspectors occasionally ask for this information upon questioning a returning H-1B worker, and delays in re-admitting such a person have occurred when the person did not have the documents in his or her possession.

Finally, many H-1B employers ultimately sponsor the H-1B worker for permanent residence through labor certification or other relevant processes. These procedures may take years, and the foreign nationals sometimes ask whether being the beneficiary of a permanent residence application will cause any questions regarding "temporary intent" when applying for a visa or admission to the U.S. This will normally not be a concern because an H-1B foreign national is expressly allowed to hold "dual intent." That is, the person may legitimately come to the U.S. for a temporary period as an H-1B nonimmigrant and at the same time lawfully seek to become a permanent resident of the U.S.

Denial and Revocation of a Petition

Despite the petitioner's best arguments, the service center may deny the H-1B petition. It will provide the petitioner with a written decision outlining the basis for its action.

The petitioner then has three options:

First, it may appeal the decision within thirty days. It may submit additional evidence and a brief setting forth a legal argument for overturning the decision. The service center will review the decision and may overturn its own decision at that point. If not, the file is forwarded to the INS Administrative Appeals Office ("AAO") in Washington, D.C. The appeal process there may take several months or a year or more, so as a practical matter, this route is likely to be unsatisfactory from the standpoint of business needs. Nevertheless, the AAO will look at the case from a fresh perspective, and it does have a record of carefully considering petitioners' legal arguments and often overturning decisions made at the service center level.

Second, the petitioner can file a Motion to Reopen and Reconsider. In this proceeding, the petitioner submits new evidence and asks the service center to reopen the proceeding, consider the new evidence, and reverse the decision. Or the petitioner may not submit new evidence but simply ask for reconsideration on the basis of legal argument.

Finally, the petitioner can simply wait and file a new petition. A petition denial will not prevent the petition from being refiled. The new or refiled petition must disclose on its face that the prior petition was denied, and thus should include sufficient evidence and argument to overcome that denial. Depending on processing times at particular service centers or because of considerations about the beneficiary's status in or out of the U.S., this may in fact be the fastest way to resolve the problem.

Finally, another unpleasant petition outcome results when the INS receives a recommendation from a U.S. consulate that, based on information obtained during the person's visa interview or from some other investigation, the INS should revoke the petition approval. The consulate may advise the INS that the beneficiary is not qualified for H-1B status, the company is not capable of a bona fide job offer, the job is not a specialty occupation, or there has been fraud committed. When this occurs, the INS will send the petitioner a notice stating its intent to revoke the petition. The petitioner has thirty days to respond with rebuttal evidence or legal argument, and the INS will then make a decision. If it revokes the petition, an appeal may be taken. If, however, the INS affirms the petition, it will inform the consulate so that the consulate may reconsider the visa application.

The INS may send a Notice of Intent to Revoke based on other derogatory evidence which is brought to its attention, such as (1) the beneficiary is no longer employed with the petitioner or working in the specialty occupation position identified in the petition, (2) the statement of facts in the petition was not true and correct, (3) the petitioner violated terms and conditions of the approved petition, or (4) some other violation of the H-1B program requirements has occurred. If the petitioner goes out of business or files a written withdrawal advising the INS that the beneficiary no longer works for it, revocation of the petition approval is "automatic" upon issuance of the letter. In other cases, the petitioner has thirty days in which to provide information rebutting the allegations listed in the Notice of Intent to Revoke before the INS makes a final decision, in the procedure described above.

A. Transfer Between Multiple Work Locations

One of the more technical aspects of the LCA and H-1B petition process which can cause problems for employers is its work location-specific nature. The LCA must state a geographic "intended area of employment," which has particular relevance, for example, in establishing the prevailing wage that the employer must pay. In turn, the H-1B petition must state the location, or locations, of employment, which must come within the locations stated on the LCA. The H-1B petition is then approved for work only on the terms described in the petition.

If the H-1B nonimmigrant works in a location that was not included on the LCA and H-1B petition, the INS may claim that he or she has failed to maintain status. The employer may then be considered to be employing the person in the location without authorization because it has not filed an LCA for the location and has not included a certified LCA for the location in its H-1B petition filing. The employer may even be accused of having made misrepresentations on the LCA or H-1B petition forms to the effect that it knew at the time of petition filing that the foreign national's work location would likely be different from that specified on the forms or that it failed to disclose that the position involved "roving" employment by its nature.

The location-specific system presents no problems where H-1B workers will be employed in only one location. It creates confusion, a bureaucratic burden, and legal risk, however, for employers who must transfer the foreign national between work locations during the worker's petition approval period. Many large companies have offices in various locations throughout the country, and may need to rotate personnel between offices. The problem is more acute for technical staffing and consulting companies, which regularly transfer personnel between client sites to fill project needs of varying duration. This employment is "roving" in nature because the ultimate work locations cannot reasonably be anticipated when the H-1B petition is filed. If the LCA and H-1B petition in these situations only specified one work location, the employer might be required to undergo a new LCA process and file an amended H-1B petition to report the change in location. With advance planning and use of the "multiple location" LCA strategy, however, the employer may draft H-1B petitions to allow for potential transfers and "roving" employment.

A petition that uses this strategy must specify the initial location where the person will work, or, if such locations are unknown, the permanent "home base" of employment, which is often the company headquarters, and then should state on the petition form or in the supporting letter that the position is subject to potential transfer to other sites based on business need. If the employer can identify the other sites in advance, it should list them. If it cannot do this, it should state that the other sites have not yet been selected, but are included within the locations identified on the LCA or LCAs submitted with the petition.

The petitioner should then submit a certified LCA wherein the first area of employment listed matches the initial location or "home base" stated on the H-1B petition. That LCA may then list a second area of employment as potential transfer location. The employer may submit additional LCAs, each of which lists two areas of employment.

Employers that file a high volume of H-1B petitions for "roving" positions use both the "multiple location" and "multiple position" LCA strategies. They typically look at the volume and potential initial work locations for H-1B petitions that they anticipate filing in the course of a year, and engage in strategic planning to obtain LCAs covering all potential areas of employment where H-1B nonimmigrants might be assigned and covering sufficient numbers of workers to meet their needs.

Due to a change in the LCA format, however, pursuing an advance "multiple location" LCA strategy is now more difficult. Formerly, any number of areas of employment could be listed on a supplemental addendum to one LCA, whereas now only two locations may be listed on a single LCA filing. This requires burdensome multiple LCA filings if an employer wishes to provide for its regional or nationwide placement needs in advance. The alternative strategy is to carefully monitor assignments of H-1B workers as they occur, and if there is no pre-existing LCA for the area, use "short-term placement" and/or a new LCA filing on a case-by-case basis.

The problem with this strategy is that when an H-1B worker is placed under a new LCA that the employer obtains after the H-1B petition was approved, INS has said that this constitutes a material change in the terms of employment requiring an amended I-129 petition to be filed. Most employers of "roving" personnel consider it impractical and burdensome to file an amended petition every time an H-1B worker changes location, in addition to filing the new LCA. The DOL has stated that it "recognizes that employers need clarity" on this point, and will consult with the INS and then provide coordinated interpretive guidance. If implemented, the proposal for a "national LCA" would also resolve this problem.

For additional discussion of "short term placement," "multiple location" strategies for roving employees and the "national LCA" proposal, please see the November 18, 2002 and November 25, 2002 articles in this series.

B. Where to File H-1B Petitions

The INS service center where the employer submits the H-1B petition is determined by the initial location of employment stated on the I-129 petition form and the LCA. For large employers with multiple, nationwide offices or technical staffing and for consulting companies with client locations throughout the country, petitions may be filed at any of the four service centers, depending on where the petitioner intends to employ the H-1B worker.

In 1998, the INS began briefly allowing large employers to submit a written request to a particular service center that it exercise "sole jurisdiction" over all that company's employment-based petition filings nationally, including H-1B petitions. The INS announced in late 2000, however, that it would no longer accept new companies into the program. INS will continue to honor the arrangement for companies previously accepted. For them it can provide strategic benefits, in providing for all H-1B petitions to be processed at one Service Center regardless of the location of employment.

C. Bench Time

Many technical staffing or consulting companies employ a business model whereby regular employees are only paid when they actually perform assigned work at a client site, and the employer can bill for their time. During periods when an employee is between client assignments or is otherwise not performing billable work, the company does not pay him or her. The company still considers itself to be the person's employer, and actively markets the person's skills to attempt to place him or her at another client site. When work for a new client begins, payment of salary resumes. These periods of unpaid status are referred to as "bench time," and typically do not last more than a few weeks. Client assignments vary in length from a few months to long-term placements lasting years. To compensate for the employee receiving no income during "bench time," the wage subsequently paid on client assignment is typically a higher hourly rate than the worker would earn as a regular salaried employee.

Historically, consulting and staffing companies have been high-volume users of the H-1B program. However, under the ACWIA statutory provisions for "nonproductive" status they are prohibited from nonpayment of wages during "bench time," and must then adopt another model for employment of H-1B personnel to comply with the INS program rules. The ACWIA provisions on nonproductive status were added in 1998 partly in response to the perceived widespread practice of consulting and staffing companies to bring foreign nationals to the U.S. and then not pay them for extended periods in "bench" status.

The most common, least risky employer action is to make such consulting positions regular salaried positions, with a guaranteed annual level of pay disbursed in regular weekly, biweekly, or monthly intervals. The LCA and H-1B petition would describe the position as a regular, full-time, salaried job, expressing the pay in annualized salary terms. Then the foreign national will receive a paycheck whether or not there is actual work at a client site.

Another strategy represents a cross between the hourly, no-pay-for-bench-time, and regular full-time salaried models for the position. In this third alternative, the employer styles the position as a flexible, part-time/full-time position subject to a range of hours to be worked during the week. The person is paid for full-time work or for any number of hours worked while he or she is on client assignment with the flexibility to have the work hours vary within the range specified. When the foreign national is in bench status, he or she is paid hourly at a level of part-time hours commensurate with "at least the average number of hours worked by the H-1B nonimmigrant." The LCA in this approach must designate "part-time" employment with the pay expressed in hourly terms. The H-1B petition similarly should describe the pay in hourly terms, and include the guaranteed minimum and upward range of hours. The ACWIA nonproductive status provisions expressly acknowledge the employer's option to designate a position as part-time on the LCA and H-1B petition and, in those instances, hold the employer's required wage obligation to pay wages at the level of "at last the average number of hours normally worked" and in no event below the minimum level of hours stated on the petition.

The next question, of course, is what level of hours is acceptable to list as the minimum in the part-time range. The statute and regulations do not specify a minimum number of hours that INS will accept on an H-1B petition. It will certainly not be acceptable to state zero hours as the minimum (using a range of "0 to 40" hours), however, because then there is no guaranteed minimum-level of pay and the employer is all but stating openly that the job opportunity consists of prohibited "speculative" employment. The level should be a minimum that represents sufficient pay to support the H-1B worker and any family members in the U.S. should the need for actual work hours and/or any subsequent bench pay based on the reduced average work hours fall below full time for a prolonged period. This minimum will be scrutinized by the U.S. consulate when the foreign national and his or her family apply for H-1B and H-4 visas, and the consular official will deny the visas if he or she feels the family could become "public charges" because the guaranteed minimum level of pay might cause them to fall below the poverty line. On balance, a reasonable minimum the author has used is 20 hours, for a range stated on the H-1B petition of "20 to 40 hours."

The employer must take care not to create an imbalance between what U.S. and H-1B workers may earn for equivalent work. If the employer creates a regular annual salary plan, for example, it should assign a value to the salary equivalent to what the normal employed consultant would earn in a year, taking into account an expected amount of bench time, with realistic discounts for any additional benefits or for the employer's risk in providing an income that is guaranteed. The employer should then offer the salary option to its U.S. workers as well.

Special Problems and Advanced Strategies Part 2

A. "Recapturing" Time and Other Strategies to Extend the Six-Year Maximum

A foreign national may remain only six years in the U.S. in H status, regardless of whether the foreign national has worked for different employers or held different positions or H classifications. Following the six years, the foreign national must spend at least one year outside the U.S. before being eligible for H status again. AC 21 and subsequent legislation created relief from the six-year limitation in certain circumstances for individuals who have made sufficient progress toward obtaining permanent residence. (For a discussion of this relief please see the December 9, 2002 article in this series.) Depending on the circumstances, employers often need advice on what options are available when the H-1B employee is reaching the six-year maximum.

When an H-1B nonimmigrant is not eligible for extension beyond six years under the AC 21 changes, one potential strategy is to attempt to "recapture" some of that time if the foreign national was physically outside the U.S. for any significant portions of the six-year period. This is based on the legal nature of the six-year limitation, which, by its terms, defines only actual time spent in the U.S. to be part of H-1B status time. If this strategy is possible, the employer and H-1B worker compute the time the worker spent outside the U.S. and then file a petition requesting extension of stay until a date that is six years later than the date the foreign national first entered the U.S. in H-1B status or was granted change of status to H-1B, plus the calculated "recapture" time.

According to INS, such recapture time must meet certain criteria. Most recently, the service centers have required time spent outside the U.S. to be "meaningfully interruptive" of the H-1B employment. Providing guidance on this concept, INS has stated that "if the foreign national maintains any relationship with the H-1B employer, he or she will be ineligible to recapture H-1B time." Under this standard, INS stated that (1) simple vacation time from the H-1B spent outside the U.S. would not be subject to recapture and (2) time spent on medical leave outside the U.S. might be subject to recapture if it is "significant." The decision as to recapture will be left subject to the discretion of the relevant INS service center director.

Because application of the "meaningfully interruptive" standard was left discretionary with individual INS offices, actual practice has been erratic. Indeed, on some occasions additional time has been granted to foreign nationals to make up for even short trips outside the U.S. Nevertheless, if a foreign national is approaching the end of his or her six-year maximum stay, an effort to recapture time spent outside the U.S. should be considered.

In filing a recapture application, the petitioning employer has the burden of proof. It is therefore important to present the request in the most favorable light and document each absence and its purpose. Typical documentation accompanying a request of this nature will include a high-quality copy of the passport clearly showing entry/exit stamps, plane tickets, payroll records of the employer indicating any sabbatical or leave, an affidavit from the foreign national or the employer describing the circumstances of any absence, and payroll records from any foreign employer or other documentation of activity abroad.

Many practitioners dispute the INS' basis for imposing the "meaningfully interruptive" standard on whether absences from the U.S. during the period of an H-1B petition "count" towards time that can be recaptured in a "final" extension of status, because it appears to directly contradict the relevant statute and regulations. Under the relevant section of the INA, the six-year limit applies to the actual "period of authorized admission" to the U.S. in H-1B status, not to the gross total period of H-1B petition approval. Under the corresponding regulation, the limit applies when the H-1B nonimmigrant "has spent six years in the United States" [author's emphasis] in H-1B status. It should be clear, the argument goes, that only time spent physically in the U.S. counts against the limit, so that any absence from the U.S., whatever the purpose, tolls running of time towards the limit until the person returns. The issue was recently litigated in federal district court in California, and the resulting opinion vindicated this more generous interpretation.

Another option for employers when a worker has used up the initial six-year H-1B status is to transfer the foreign national to an office or affiliate outside the U.S. for the required year. Then the individual may continue to work for the employer while completing the prerequisite to qualifying for an additional six years in H-1B status.[20] An issue that then frequently arises is whether the individual can travel to the U.S. as a business visitor. Although the foreign national is not prohibited from making such trips on behalf of the new "foreign" employer, this cannot be used as a vehicle of convenience essentially to have the foreign national continue to work in the U.S. Such trips should be made only for bona fide, short-term temporary business visits.

A foreign national might also be near the six-year limit on H-1B stay but believe that an opportunity to apply for adjustment of status to permanent residence is imminent because a preference petition to classify him or her as eligible for permanent residence is pending or will shortly be ready to file, providing a basis to apply for adjustment, but the foreign national is not eligible for a seventh-year H-1B extension. In such a situation the person may make a tactical decision to "overstay" and wait in the U.S. to submit the application for adjustment of status. Under a special provision of the law governing applications for adjustment of status, a person who has been lawfully admitted to the U.S. may apply for adjustment of status to permanent residence in an employment-related category, notwithstanding having overstayed the period of admission or worked without authorization, so long as the period of overstay or unauthorized employment does not exceed 180 days. Under another special provision, if an underlying labor certification or preference petition was filed before April 30, 2001, and the person was present in the U.S. on December 21, 2000, he or she may apply for adjustment of status and be forgiven any overstay or unauthorized employment with payment of a $1,000 fine.

The employer will not be authorized to employ the foreign national during the overstay period, but as soon as the foreign national submits the application for adjustment of status, he or she will be able to apply for an "employment authorization document" (EAD) card granting a resumption of legal work authorization.

This "tactical overstay" strategy is very risky, and it is only recommended if the parties first consult with expert legal counsel. If there has been a miscalculation and the opportunity to apply for adjustment of status does not arise within the 180-day overstay period, the foreign national must then leave the U.S. and return to his or her home country to obtain any further visa, unless the foreign national decides to rely on Section 245(i). If the person leaves before 180 days have passed, he or she should be able to complete processing for permanent residence through the U.S. consulate in his or her country of last residence, or obtain another H-1B visa after one year has elapsed. If the person stays in the U.S. beyond the 180-day overstay period, he or she becomes subject to a three-year bar on reentering the U.S., or if the overstay exceeds one year, a ten-year bar.

B. Inadvertent Lapse of Status

There are a variety of different situations in which an H-1B employee or an H-4 family member may inadvertently fall out of status. Common examples include the following:

An H-1B employee working for Company A has a new H-1B petition approved so that he or she may work for Company B. The H-1B employee then travels outside the U.S. and re-enters the country using a pre-existing H-1B visa obtained as a result of his H-1B employment with Company A, but the employee fails to present the Notice of Approval of his or her current H-1B employment with Company B at the time of entry. In such a situation, the H-1B employee would be re-admitted only for the remaining validity period of the old visa, even though he or she was eligible for re-admission for a longer period because of the new H-1B approval for Company B. The employee might be unaware that he or she has been admitted for a shorter period than the Company B approval, and his or her status might inadvertently lapse when the shorter period from the Company A approval expires.

An H-1B employee working at Company A has a petition to amend/extend stay filed by Company B. The employee's family members are in valid H-4 status but, either because they do not believe that they need to extend their stay or Company B is unaware of the need to extend the stay of the family members, nothing is filed on their behalf. The authorized stay of the family members will therefore not be extended for a period coextensive with the Company B approval for the employee. When the date of the family members' original approval, coextensive with the Company A petition, expires, they may inadvertently overstay.

There are a variety of other scenarios that arise, with varying degrees of complexity. Selection of a proper strategy to rectify a problem depends on the particular circumstances. If the H-1B employee has inadvertently fallen out of status, he or she must be placed back into H-1B status retroactive to the date that he or she initially fell out of status. This is necessary to avoid both the H-1B employee's having worked without authorization and the employer's having improperly employed a person not authorized to work.

Under some circumstances, a simple problem can be addressed through a visit to the local INS district office or to the port of entry where the person was admitted, to request that the person's admission record be amended or re-annotated with a new date. In other situations, the petitioner may file an H-1B petition seeking "retroactive" extension of status for the foreign national. The INS has discretionary authority to forgive any "delay" in petition filing and approve a "late filed" or retroactive extension of H-1B status where the applicant can show that (1) the delay was due to "extraordinary circumstances beyond the control of the applicant or petitioner" and the INS "finds the delay commensurate with the circumstances"; (2) the foreign national has not otherwise violated his or her nonimmigrant status; (3) the foreign national remains a bona fide nonimmigrant; and (4) the foreign national is not the subject of deportation or removal proceedings.

If family members have overstayed, so that work authorization is not an issue, and the period of overstay has been 180 days or shorter, thus avoiding application of the three- or ten-year "unlawful presence" bar on re-entry to the U.S., a simple solution may be for the family members to leave the U.S. and return to the home country. The family members may then apply for new H-4 visas and re-enter the U.S. to obtain new periods of stay co-extensive with that of the principal H-1B nonimmigrant. Unfortunately, the overstay prevents the family members from obtaining visas in Mexico or Canada or from another third country but it normally has no further negative effect so long as the overstay period was less than 180 days, and the family members return to their home country to make new visa applications.

If the foreign national or family members have overstayed for more than 180 days, they should not leave the U.S. because they can then be barred from applying for visas or re-entering the U.S. (1) for three years if the "unlawful presence" was greater than 180 days but less than one year or (2) for ten years if the "unlawful presence" was greater than one year. In such a situation, the family member(s) should apply for a retroactive extension of stay, asking the INS to exercise its discretionary authority to grant relief, to link their status back to the point at which it initially lapsed. If such an application is granted, the family members will not be subject to a re-entry bar.

Obviously, favorable use of this discretionary authority by the INS can never be assumed. In practice, it has been the observation of the author that, in appropriate circumstances in the past, the INS has been willing to show reasonableness and flexibility in correcting problems of status lapse or late filing of a petition that were inadvertent or resulted from a good-faith misunderstanding of immigration procedures. In the post-9-11 environment, however, INS has indicated it will be showing "zero tolerance" for late-filed or out-of-status applications or petitions where the problem would have previously been overlooked a matter of discretion. It is still possible to make the "extraordinary circumstances" request for relief, but INS can be expected to hold those requests to a more convincing standard.

C. Anticipating the Annual H-1B Cap

With the potentially significant impact of the H-1B cap on the employer's ability to recruit and hire foreign nationals in H-1B status, it becomes increasingly important for the employer to implement an H-1B strategy that minimizes the risks of an H-1B cap problem.

Perhaps the single most important step that the employer can take is to proactively identify employees it hires in F-1 or J-1 practical training status who typically come to the employer with an employment authorization card issued by the INS good for one year, and then work with these employees to file petitions for change of status to H-1B early in the annual H-1B cap cycle. These employees frequently begin work during May, June, or July, after graduation from a U.S. academic program. In some recent years the cap has been reached long before that point in the year, so if the employer waits the full year of the employee's practical training before filing the H-1B petition it may be too late, and the person will be unable to obtain work authorization until the following October. To avoid these problems, employers should prepare and file H-1B petitions promptly after the employment "relationship" begins and obtain approval early in the INS fiscal year. Where appropriate, the employer can ask for an H-1B start date as late as six months after the date of filing, thereby using as much of the practical training period as possible before commencing the six-year H-1B status period.

Second, employers that recruit abroad should, to the extent possible, try to schedule such recruiting at a time that, if they find qualified, interested applicants, would leave the employer with time to prepare and file an H-1B petition that can be approved prior to the cap's being reached. Late summer or early fall are the best times. Spring and early summer are inadvisable, unless the employer is willing to wait until October 1 for the new employees to begin employment.

Finally, the potential impact of the H-1B cap each year makes it especially important that employers train recruiters to avoid making unrealistic promises of employment to foreign nationals who need a new H-1B visa approval to begin work.

The August 12, 2002 article in this series describes the recent history of the H-1B cap. The cap has not been a problem since AC 21 raised the annual limit to 195,000, but when the limit reverts to 65,000 for fiscal year 2004 this kind of strategic planning will once again assume critical importance.

Special Problems and Advanced Strategies Part 3

A. Mergers, Acquisitions, Relocations, and Other Corporate Changes

Corporate acquisitions, mergers, and other forms of corporate restructuring are increasingly common. It is important for an employer to know when, and to what extent, such a change in corporate ownership or structure requires any employer to take action with respect to employees in H-1B status. Such actions might include filing a new Labor Condition Application with the DOL. Recent changes in the law have clarified the employer's obligations following a corporate reorganization. New LCA and H-1B petition filings are not required if (1) the new employing entity is prepared to assume all the obligations, liabilities, and undertakings of the prior entity, including obligations arising in connection with existing LCA and H-1B filings, and (2) there are no material changes in the H-1B nonimmigrant's job.

For example, if an employer undergoes a "change in corporate structure" as the result of an "acquisition, merger, 'spin-off,' or other such action, the new employing entity need not file new LCAs for H-1B nonimmigrants transferring to it, regardless of whether there is a change in the federal Employer Identification Number (EIN), provided certain conditions are met:

(1) the new employing entity must maintain a list of the transferring H-1B personnel,

(2) the new employing entity must keep in a "public access file" a list of affected LCAs of the prior employer, a description of the new entity's "actual wage" system applicable to the H-1B workers, and the EIN of the new entity, and

(3) before employing any of the predecessor's H-1B personnel, the new employing entity must execute and place in the public access file a sworn statement by an authorized representative expressly acknowledging "assumption of all obligations, liabilities and undertakings arising from or under attestations made in each certified and still effective LCA filed by the predecessor entity." The statement must also contain an explicit agreement to abide by LCA regulations, maintain the statement in the public access file, and make it available to the public or DOL upon request.[21]

Next, an amended H-1B petition is not required if the employer is "involved in a corporate restructuring, including but not limited to, a merger, acquisition, or consolidation, where a new corporate entity succeeds to the interests and obligations of the original petitioning employer and where the terms and conditions of employment remain the same but for the identity of the petitioner." The provision does not define what is needed to show that the new entity "succeeds to the interests and obligations of the original petitioning employer." Corporate restructurings can take many forms, ranging from straightforward stock transactions or divisional realignments to complex asset deals where the new entity may purchase only a limited bundle of goods, intellectual property, contractual rights, and other tangible or intangible property associated with a specific product line or business unit, and the prior entity continues in existence with its other operations. Pending further guidance from the INS, a reasonable interpretation is that the "interests and obligations" to which the new entity must succeed are simply those associated with actual employment of the H-1B nonimmigrant. Thus, where the new entity (1) will assume employment of the H-1B nonimmigrant and enjoy the benefit of his or her work and, (2) correspondingly, is prepared to assume liability for the salary and other obligations associated with the prior entity's LCA and H-1B petition, executing the necessary statement for the public file, the new entity may qualify as a successor and avoid filing new LCA and H-1B petitions.

Some corporate changes are not reorganizations -- the entity in existence after the changes occurs is the same entity as existed before the change. In such circumstances, "successor" action is not needed. An example is a corporate stock acquisition where one entity acquires all the stock of the H-1B employer without any change in its operations, structure, or EIN. In this situation there has not been a restructuring of the employing entity but merely a change in ownership. Another example is when a company changes its name. The INS does not consider a name change to be a material change that must be reported; the new name must simply be included in H-1B petitions filed for extension or amendment of status. To avoid confusion, however, a commonly recommended strategy is for future H-1B and other petition filings by the company to identify the employer as "[new name], formerly known as [old name]."

If, after a corporate restructuring, the employer need not file a new or amended LCA and H-1B petition, it is still sometimes advisable to do so. First, the new entity may be uncomfortable signing a legal document that assumes the potential liabilities of the predecessor under the H-1B program. Under the statement described above, which must be placed in the public access file, the successor is liable for any violation of LCA obligations committed by the prior entity, including, for example, the failure to pay the required wage. The employer must decide whether it is willing to assume all such potential liabilities. The use of representation and warranty and/or indemnification provisions relating to LCA compliance in the acquisition agreement or related contract may be useful in this regard. If the new employer does not wish to assume liability for the predecessor, then it must file a new LCA.

Second, consider the following situation: The name of the employing entity has changed as a result of some corporate event and an H-1B employee thereafter travels outside the U.S. Upon applying for readmission to the U.S., that H-1B employee may well be asked questions by an INS officer at the port of entry designed to determine whether the H-1B beneficiary is still employed by the employer that filed the H-1B petition on his/her behalf. If there has been a change in the name of the employer, it could create an awkward situation for the H-1B employee, who might have to convince the INS officer that a "successor employer" exists.

Even if the H-1B employee is provided with appropriate documentation of the "successor employer" relationship, this is a potentially dangerous situation because it leaves the "successor employer" determination to the INS officer at the port of entry, and he or she has broad discretion over re-admission of the H-1B employee. It is therefore advisable to file an amended H-1B petition to reflect most corporate changes, even if such a petition may not be legally required, to avoid potential travel-related problems for the H-1B employee.

Current INS rules require an "amended" petition to reference any new Labor Condition Application that is applicable to the person's employment. As a result, if the employer elects to file a new LCA, it will also trigger the need for an INS petition to be filed. This is potentially quite burdensome to employers. Thus, for example, if an employer files a new LCA for numerous H-1B nonimmigrants, it must also prepare corresponding amended petitions. When situations like this arise it may be possible to work out a flexible arrangement with the relevant INS service center.[22]

If a corporate change results in a material change in the H-1B employment, rendering information on the original LCA inapplicable (such as reassignment to a new area of employment or a change in duties sufficient to place the job in a new occupational classification), the employer of course must file a new LCA and an H-1B petition. Employers must always file LCAs and petitions reflecting material changes in H-1B employment, regardless of whether the material change is the result of corporate restructuring.

Finally, the employer should remember that when it files an "amended" petition that does not seek any extension of the validity period of H-1B classification beyond what was granted in the original petition, it will not have to pay the $1,000 education and training component of the petition filing fee.

B. Termination or Resignation of an H-1B Employee

A variety of issues arise when an employer elects to terminate the employment of an H-1B employee, or the employee resigns, before the end of the petition period. Concerns about the consequences of terminating H-1B employees have become common with the downturn in the economy. There are two issues to consider: the employer's duties in the termination, and the effect on the foreign national's legal status in the U.S.

Employers have three duties following the termination of an H-1B employee. First, the employer should notify the INS when it terminates an H-1B worker. The INS requires petitioners to notify the INS "immediately . . . of any changes in the terms and conditions of employment of a beneficiary which may affect eligibility under [the H-1B program]. . . . If the petitioner no longer employs the beneficiary, the petitioner shall send a letter explaining the change(s)" to the INS.

Second, if the H-1B employee is dismissed by the employer for any reason prior to the end of the authorized H-1B stay, the employer is liable for "the reasonable costs of the return transportation of the foreign national abroad." "Abroad" means to the foreign national's last place of foreign residence. The obligation does not include H-4 family members. This is a specific commitment which the INS requires the employer to make in signing the H Classification Supplement to the Form 1-129. However, as a practical matter, the obligation to pay return transportation costs for foreign nationals does not arise frequently because many foreign nationals do not wish to return home and instead seek other H-1B employment. The obligation also does not extend to paying the foreign national the cash equivalent of an airplane ticket home if the foreign national elects to stay in the U.S.

Third, unless the employer takes certain steps to evidence the termination, the DOL might determine that it placed the H-1B foreign national in "nonproductive" status in violation of the employer's required wage obligations, with attendant back pay liability. The regulations specify that the required wage obligation continues until there has been a "bona fide termination of the employment relationship." The nature of "bona fide termination" depends on the circumstances. One important factor is the presence of a clear, unequivocal statement in writing to the employee that the relationship has been terminated. Two other factors listed in the regulations are whether the employer has taken the steps described above to notify the INS and to offer return transportation.

Therefore, when it terminates an H-1B employee, the employer should, for its own protection, (1) confirm the termination in writing to the employee, (2) notify INS in writing of the termination, (3) offer to tender an airplane ticket, or otherwise provide for transportation to the person's home country, and (4) keep documentation that it has taken these steps. The notice letter to INS need only reference the INS file number of the approved H-1B petition and report that the foreign national is no longer employed by the petitioner. The INS will then issue a letter acknowledging the withdrawal and stating that approval is "automatically revoked" pursuant to regulatory procedure.

Of separate significance is the impact of the termination of employment on the foreign national's ability to maintain H-1B or other temporary status and stay in the U.S. The foreign national's H-1B status is dependent upon continued employment in the position that was the basis for the H-1B classification. Therefore, once the employment ends, the individual can no longer maintain H-1B status. Once a foreign national loses nonimmigrant status, there is no "grace period" in the law enabling the person to remain in the U.S. Thus, the foreign national will likely be unable to "transfer" the H-1B status to a new employer in an amendment or extension of status petition or apply for change to another nonimmigrant status because such a petition or application requires proof of lawful maintenance of status under the prior petition until the new petition is filed. The INS requires evidence of continuing employment in the prior H-1B job, such as copies of recent paychecks, as part of such a petition or application. If the beneficiary cannot demonstrate continued H-1B status, then the request to transfer the H-1B to a new employer or change status will likely be denied. The foreign national then must leave the U.S. and obtain a new visa abroad before returning to the U.S.

If employers want to assist terminated H-1B nonimmigrants to transition to other U.S. employment or otherwise manage to stay in the U.S. legally, they must ensure that a foreign national's employment is not terminated until he or she has a new employer and the new employer has filed an H-1B petition on behalf of the employee or the employee has properly applied to change status. The termination of the old employment will not affect the validity of a new H-1B petition once it is filed.

Sometimes the H-1B nonimmigrant may not secure new employment before termination is effective. If the foreign national remains in the U.S. following the termination, he or she is not in valid H-1B status and consequently is subject to removal. Depending on the circumstances, it still might be possible for a new employer to submit a petition requesting extension of H-1B status using the "extraordinary circumstances" discretionary relief provision. Typically, the H-1B beneficiary describes in an affidavit the circumstances of the termination that were beyond his or her control, and how he or she diligently pursued a new job offer immediately upon learning of the termination. In the past, INS has been reasonably flexible in approving petitions requesting "retroactive" extensions of status for beneficiaries who suffered sudden layoffs in a prior position for short periods after the termination. In a June 2001 memorandum, INS indicated that it expected to propose a rule to afford H-1B beneficiaries no longer working for the initial H-1B employer "some reasonable period of time such as 60 days" after leaving the employer to begin working for a new employer and have an H-1B transfer petition filed under AC 21 portability. Pending such a proposal, adjudicators were to consider H-1B transfer petitions with issues about maintenance of status on a "case by case" basis, and were reminded of the regulatory provisions permitting discretionary relief under certain circumstances. However, in the wake of September 11 the INS never proposed this 60 day grace period rule, and now states that the policy is "zero tolerance" for status violations. "Extraordinary circumstances" relief can still be requested but it will likely be much less freely given.

The return transportation obligation does not apply when the H-1B foreign national voluntarily terminates his or her employment. Similarly, the employer is excused from the "required wage" obligation because the absence from work would be at the employee's voluntary request, rather than due to employer-imposed nonproductive time. If the foreign national resigns, the employer should therefore obtain a written resignation letter for its file as evidence of the voluntary leaving.

When an H-1B employee resigns it is still advisable to notify INS and withdraw the petition to terminate any obligation to the person. However, if the employee might return at a later time, the employer can take no action and leave the petition approval "open." The employee may then return to work any time during the approval's validity period. Again, the employer should obtain a written resignation statement or request for extended leave from the foreign national for its file which indicates that the foreign national voluntarily left employment. This safeguard should obviate the "nonproductive" time required wage and return transportation obligations.

Finally, the employer should be aware of one other obligation which arises when an H-1B employee resigns. Under another statutory change added by ACWIA, it is a violation of law for the employer to "require an H-1B nonimmigrant to pay a penalty for ceasing employment with the employer prior to a date agreed to by the nonimmigrant and the employer." This statute does not prohibit the employer from recovering liquidated damages. Whether a particular payment constitutes a penalty and or liquidated damages is determined by state law. Under no circumstances may liquidated damages recoup the $1,000 education and training portion of the filing fee.

[1] The actual statement the employer must sign on the form reads, "H-1B nonimmigrants will be paid at least the actual wage level paid by the employer to all other individuals with similar experience and qualifications for the specific employment in question or the prevailing wage level for the occupation in the area of employment, whichever is higher." (emphasis by DOL on LCA form).[2] One in particular, a classification for "All Other Professional, Paraprofessional and Technical Workers Not Classified Separately," combines forty-three DOT titles into one data set. Under this category a technical translator will be assigned the same prevailing wage as a crossword puzzle maker, circus agent, taxidermist, and fireworks display specialist. It will also be assigned the same wage as a director of translation, certainly a related position but one where the wage should be higher because a director of translation would normally supervise a technical translator.
[3] The main OES source for all other employers is known as the "ALC" database. Further explanation is contained in a pair of DOL policy memoranda which instruct the SESAs on implementation of the separate data sets: G.A.L. No. 2-99 (Apr. 23, 1999) and G.A.L. No. 1-00 (May 16, 2000).
[4] The actual statement which the employer signs on the LCA form reads:

"On the date this application is signed and submitted, there is not a strike, lockout or work stoppage in the course of a labor dispute in the occupation in which H-1B noninunigrants will be employed at the place of employment. If such a strike or lockout occurs after this application is submitted, I will notify ETA within 3 days of the occurrence of such a strike or lockout and the application will not be used in support of petition filings with INS for H-1B nonimmigrants to work in the same occupation at the place of employment until ETA determines the strike or lockout has ceased."

[5] Special additional attestations required of "H-1B dependent" employers will be discussed in the next article in this series.
[6] Note that the LCA regulations formerly provided for posting of "exact copies" of the LCA as a means of notice. The current version of the regulation, published in December 2000, removed the express reference to posting an exact copy, but the preamble to the regulations states that such posting will satisfy the substantive requirements. Just the three-page form itself may be posted, without the nine-page cover instructions, and it may be posted with the three pages stapled together rather than side by side, so long as an employee could readily view each page of the form.
[7] See the September 16, 2002 article in this series for a discussion of foreign degree equivalence.
[8] For comparison, see the September 23, 2002 article in this series for a discussion of the general requirement for H-1B classification that a degree be directly related to the occupation.
[9] Where an employer is part of a multinational corporate operation and employs H-1B nonimmigrants in the U.S. while on a foreign payroll, under certain circumstances it may maintain the person on benefits provided in his or her home country.
[10] Indeed, the regulations expressly provide that the beneficiary is "not a recognized party" in the petition proceeding. [11] Having an arrangement where the beneficiary pays legal or other costs associated with the preparation and filing of a Labor Condition Application and/or H-1B petition is also inadvisable because it complicates the "required wage" analysis in the LCA process. DOL regulations characterize such costs as the "employer's business expense" and specify that any imposition of the costs on the beneficiary, whether by payroll deduction or by the beneficiary directly paying the costs outside the payroll system, constitutes an "unauthorized deduction" from the employee's wages that are used in satisfaction of the "required wage" obligation. As discussed below, there is a separate express, absolute prohibition on the employer imposing payment of the $1000 education and training portion of the filing fee on the beneficiary.[12] Department of State (DOS) Form DS-156, and for males aged 16 to 45, DS-157; Form DS-157 is a new form added this year asking a variety of background information on education, training, career experience, travel history and any participation in armed conflict.[13] Most consulates have web sites which can be accessed through http://usembassy.state.gov or http://travel.state.gov/links.html to review local information n procedures and requirements. A directory of other consular contact information may be found at http://travel.state.gov/visainfo.html.[14] A useful table of visa reciprocity may be accessed at http://travel.state.gov/visa_services.html.[15] The tear-off portion at the bottom of the notice of approval constitutes the new 1-94. As a precaution, the employer should keep a full copy of the relevant notice of approval in the person's 1-9 file in addition to the 1-94 card.[16] See http://www.ins.usdoj.gov under "Forms On-line."[17] This procedure was formerly a popular strategy seen as relatively low-risk because of the availability of "automatic revalidation," allowing the person to return to the U.S. and wait in the event the visa application is delayed or refused. As described above, that procedure is no longer available when the person applies for a visa while out of the country, so that if the application is delayed or refused the person must typically wait in Canada or Mexico or return to the home country to reapply. See the prior ILW.COM article by this author in the March 21, 2002 edition of Immigration Daily.[18] Consulates will be unfriendly if they expect the applicant is "shopping" for a favorable location to apply, so as in the Canada/Mexico application strategy, the person should be prepared for having to return to the home country.[19] Information on visa revalidation by mail is available at: http://www.travel.state.gov/revals.html.[20] The individual might also qualify for L-1 intracompany transferee status at the end of the one-year period.[21]Note that although employment of an existing H-1B nonimmigrant worker may continue under the LCA with the appropriate statement placed in the file, the LCA may not be used to support any new or extension petitions which are prepared after the corporate change in structure. A new LCA bearing the correct new information must be filed at that time.[22]The author encountered a situation where, under this scenario, a simple tax identification number change resulting from an employer's tax-related consolidation of business units (under the former scheme where a change in EIN did require a new LCA) would have required the employer to file 600 amended H-1B petitions for workers whose jobs were wholly unaffected by the change. Due to the unusual circumstances and potential burden this would have imposed on the employer and the INS, the latter agreed to waive the new petitions. The employer was obligated instead to report the change when it petitioned for routine extensions for individual workers.

About The Author

George N. Lester IV is of the Immigration Practice Group (the "Group") of the law firm of Foley, Hoag & Eliot LLP. Foley, Hoag & Eliot LLP is a full-service law firm of 200 lawyers in Boston and Washington, D.C. It was the first large law firm in Boston to develop an expertise in business immigration law, and for over thirty years its Group has represented employers in a full range of procedures to obtain temporary or permanent authorization to employ foreign professionals. Mr. Lester has practiced immigration law for ten years, and regularly speaks to business, academic, and professional groups on immigration topics. As part of his regular AILA activities, Mr. Lester meets with officials of the INS Vermont Service Center to discuss H-1B and other liaison topics. He also serves as Treasurer and a Board Member of the Political Asylum/Immigration Representation Project (PAIR) in Boston, and received that organization's Pro Bono Attorney Award for Dedication and Commitment to Human Rights in May 1996. Mr. Lester is a 1989 graduate of Northeastern University School of Law.

This article is a consolidated reprint of Encore Articles 1-6 which originally appeared in each week's issue of Immigration Daily beginning January 21, 2003. George N. Lester IV of the Foley Hoag LLP Immigration Practice Group based on a chapter he authored titled "Specialty Occupation Professionals," in the treatise Business Immigration Law: Strategies for Employing Foreign Nationals, edited by Rodney A. Malpert and Amanda Petersen, and appears here with the permission of the publisher. Published by Law Journal Press. Copyrighted by NLP IP Company. All rights reserved. Copies of the complete work may be ordered from Law Journal Press, Book Fulfillment Department, 105 Madison Avenue, New York, New York 10016 or at www.lawcatalog.com or by calling 800-537-2128, ext. 9300.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.